Approximate Date of Proposed Public Offering: As soon as
practicable after the effective date of this Registration Statement.
It is proposed that this filing will become effective under Rule 485:
( X ) immediately upon filing pursuant to paragraph (b)
( ) on ___________ pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)
( ) on (date) pursuant to paragraph (a)(1)
( ) 75 days after filing pursuant to paragraph (a)(2)
( ) on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following:
( ) This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Filed pursuant to Rule 485(b)
File Nos. 33-19229; 811-5430
SSgA FUNDS
State Street Financial Center
One Lincoln Street
Boston, Massachusetts 02111-2900
1-800-997-7327
www.ssgafunds.com
SSgA PRIME MONEY MARKET FUND
CLASS T SHARES
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NEITHER
DETERMINED THAT THE INFORMATION IN THIS PROSPECTUS IS ACCURATE AND COMPLETE, NOR
APPROVED OR DISAPPROVED OF THESE SECURITIES. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The Prime Money Market Fund Class T Shares seeks to maximize current income, to
the extent consistent with the preservation of capital and liquidity and the
maintenance of a stable $1.00 per share net asset value, by investing in dollar
denominated securities.
Class T Shares of the Prime Money Market Fund may not be purchased by
individuals directly, but must be purchased through a financial institution
which is permitted by contract with the fund to offer shares (the Financial
Intermediary). This prospectus should be read together with any materials
provided by the Financial Intermediary.
PROSPECTUS DATED AUGUST 25, 2003
1
TABLE OF CONTENTS

2
INVESTMENT STRATEGIES AND PRINCIPAL RISKS
INVESTMENT OBJECTIVE
The Prime Money Market Fund Class T Shares seeks to maximize current income, to
the extent consistent with the preservation of capital and liquidity and the
maintenance of a stable $1.00 per share net asset value, by investing in dollar
denominated securities.
The fund is a diversified company under the Investment Company Act of 1940, as
amended (the 1940 Act). The investment objective of the fund may be changed only
with the approval of a majority of the fund's shareholders as defined in the
1940 Act. SSgA Funds Management, Inc. (the Advisor), serves as the fund's
investment advisor.
PRINCIPAL INVESTMENT STRATEGIES
The fund attempts to meet its investment objective by investing in high
quality, US dollar-denominated money market instruments. Such instruments
include: (1) US Treasury bills, notes and bonds; (2) other obligations issued
or guaranteed as to interest and principal by the US Government, its
agencies, or instrumentalities; (3) instruments of US and foreign banks,
including certificates of deposit, banker's acceptances and time deposits;
these instruments may include Eurodollar Certificates of Deposit ("ECDs"),
Eurodollar Time Deposits ("ETDs") and Yankee Certificates of Deposit
("YCDs"); (4) commercial paper of US and foreign companies; (5) asset-backed
securities; (6) corporate obligations of US and foreign companies; (7)
variable and floating rate notes; and (8) repurchase agreements.
There are risks associated with these instruments, which are described in the
section called Principal Risks.
Fund managers base their decisions on the relative attractiveness of different
money market investments which can vary depending on the general level of
interest rates as well as supply/demand imbalances in the market.
PRINCIPAL RISKS OF INVESTING IN THE FUND
The following is an alphabetized description of the principal risks associated
with an investment in the fund. For additional information concerning the
instruments and investment techniques identified in these descriptions, see
"Additional Information about the Fund's Objectives, Investment Strategies and
Risks."
ASSET-BACKED SECURITIES RISK. Asset-backed securities are obligations whose
principal and interest payments are supported or collateralized by pools of
other assets, such as automobile loans, credit card receivables and leases.
Defaults on the underlying assets may impair the value of an asset-backed
security. Furthermore, there may be legal and practical limitations on the
enforceability of any security interest granted with respect to those underlying
assets. Asset-backed securities are also subject to prepayment risk.
CALL RISK. Call risk is the risk that an issuer will exercise its right to pay
principal on an obligation held by a fund (such as a mortgage-backed security)
earlier than expected. This may happen when there is a decline in interest
rates. Under these circumstances, a fund may be unable to recoup all of its
initial investment and will also suffer from having to reinvest in lower
yielding securities. Forced to reinvest the unanticipated proceeds at lower
interest rates, the fund would experience a decline in income and the potential
for taxable capital gains.
CREDIT/DEFAULT RISK. Credit/default risk is the risk that an issuer or guarantor
of a fixed-income security held by a fund may default on its obligation to pay
interest and repay principal. There is also a risk that one or more of the
securities will be downgraded in credit rating. Credit/default risk includes the
risk that an issuer or guarantor of a security, or a bank or other financial
institution that has entered into a repurchase agreement, may default on its
payment obligations. Credit risk, which has the potential to hurt the fund's
performance, should be low for funds with a policy of purchasing mostly high
quality bonds.
DOLLAR-DENOMINATED INSTRUMENTS RISK. Dollar-denominated instruments, including
Eurodollar Certificates of Deposit, Eurodollar Time Deposits and Yankee
Certificates of Deposit, issued by foreign banks, foreign bank branches and
foreign corporations are not necessarily subject to the same regulatory
requirements that apply to US banks and corporations. These instruments could
lose value
3
as a result of political, financial and economic events in foreign countries;
less stringent foreign securities laws, regulations and accounting, auditing and
recordkeeping standards; the public availability of information and, for banks,
reserve requirements, loan limitations and examinations. These risks increase
the possibility that a non-US bank or corporation may become insolvent or
otherwise unable to fulfill its obligations on these instruments. These
instruments are also subject to credit/default risk.
GOVERNMENT SECURITIES RISK. Unlike securities issued by the US Treasury,
securities issued by US government agencies and instrumentalities are subject to
the risk that the US government will not provide financial support to such
agencies or instrumentalities if it is not obligated to do so by law.
Investments in US government securities may return less than investments in
non-government fixed income securities.
INCOME RISK. Income risk is the risk that falling interest rates will cause a
fund's income over time to decline.
INTEREST RATE RISK. During periods of rising interest rates, a fund's yield (and
the market value of its securities) will tend to be lower than prevailing market
rates; in periods of falling interest rates, a fund's yield (and the value of
its securities) will tend to be higher than prevailing market rates. The longer
the duration of the security, the more sensitive the security is to this risk.
Securities with longer maturities and the securities of issuers in the financial
services sector can be more sensitive to interest rate changes than securities
with shorter maturities. Short-term securities tend to react to changes in
short-term interest rates. A 1% increase in interest rates would reduce the
value of a $100 note by approximately one dollar if it had a one year duration,
but would reduce its value by approximately fifteen dollars if it had a 15 year
duration.
MARKET RISK. The value of the securities in which a fund invests may go up or
down in response to the prospects of individual companies and/or general
economic conditions. Price changes may be temporary or may last for extended
periods.
MONEY MARKET RISK. The risk that a fund will not be able to maintain a NAV per
share of $1.00 at all times. Although a money market fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in a money market fund. An investment in a money market fund is not a
deposit of any bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
PREPAYMENT RISK. Prepayment risk is the risk that principal on mortgages or
other assets underlying a mortgage-backed or asset-backed security may be paid
prior to the stated maturity date at any time. If a fund purchases
mortgage-backed or asset-backed securities at a premium, a faster than expected
prepayment rate will reduce both the market value and the yield to maturity from
those which were anticipated. A prepayment rate that is slower than expected
will have the opposite effect of increasing yield to maturity and market value.
Conversely, if a fund purchases mortgage-backed securities at a discount, faster
than expected prepayments will increase, while slower than expected prepayments
will reduce, yield to maturity and market values. Prepayment of loans underlying
asset-backed and mortgage-backed securities can be expected to accelerate during
periods of declining interest rates.
4
RISK AND RETURN
The following bar chart illustrates the risks of investing in the fund by
showing changes in the fund's performance from year to year over the life of the
fund. A fund's past performance is not necessarily an indication of how the fund
will perform in the future.
The returns and all other information shown below are for the original SSgA
Fund class (referred to in this prospectus as the "Institutional Class") that
is not offered in this prospectus. The annual returns for the Class T Shares
offered in this prospectus would be lower due to higher distribution and
service (12b-1) fees of the Class T Shares.

Best Quarter - December 31, 2000: 1.64%
Worst Quarter - December 31, 2002: 0.37%
Year-to-Date - June 30, 2003: 0.57%
The following table further illustrates the risks of investing in the fund by
showing how the fund's average annual returns for 1 and 5 years and since the
fund's inception compare to the returns of a broad-based securities market
comparison (returns shown reflect no deductions for fees, taxes or expenses).
The average annual total returns for the Class T Shares offered in this
prospectus would differ only to the extent that the Institutional Class and
Class T Shares of the SSgA Funds do not have the same expenses.
Average Annual Total Returns
For the Periods Ended December 31, 2002:

* The fund began operating on February 22, 1994. The returns would have been
lower without the contractual management fee waiver and expense reimbursement.
7-Day Yields
For the Period Ended December 31, 2002:

CURRENT EFFECTIVE
Prime Money Market Fund 1.20% 1.36%

Current yield information for the fund is available toll free by calling
1-800-647-7327 or by visiting our website at www.ssgafunds.com.
5
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)

EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS.
THE EXAMPLE ASSUMES THAT YOU INVEST $10,000 IN THE FUND FOR THE TIME PERIODS
INDICATED, AND THEN REDEEM ALL OF YOUR SHARES AT THE END OF THOSE PERIODS. THE
EXAMPLE ALSO ASSUMES THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR, THAT ALL
DIVIDENDS AND DISTRIBUTIONS ARE REINVESTED, AND THAT THE FUND'S OPERATING
EXPENSES REMAIN THE SAME. ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER,
BASED ON THESE ASSUMPTIONS, YOUR COSTS WOULD BE:

Investors purchasing fund shares through a financial intermediary, such as a
bank or an investment advisor, may also be required to pay additional fees for
services provided by the intermediary. Such investors should contact the
intermediary for information concerning what additional fees, if any, will be
charged.
----------
(1) The Advisor has contractually agreed to waive .05% of its .15% management
fee until December 31, 2010. Also, the Advisor has contractually agreed to
reimburse the fund for all expenses to the extent that total expenses exceed
.80% of average daily net assets on an annual basis until December 31, 2004. The
annual management fee after waiver and reimbursement is .10%. The total annual
expenses shown above have been restated to reflect the waiver and reimbursement.
6
MANAGEMENT OF THE FUND
INVESTMENT ADVISOR. SSgA Funds Management, Inc. (the Advisor), State Street
Financial Center, One Lincoln Street, Boston, Massachusetts 02111-2900, serves
as the investment advisor for the SSgA Funds and directs the Funds' investments
in accordance with each fund's investment objective, policies and restrictions.
The Advisor is registered with the Securities and Exchange Commission as an
investment advisor under the Investment Advisers Act of 1940 and is a wholly
owned subsidiary of State Street Corporation, a publicly held bank holding
company. As of July 31, 2003, the Advisor had over $75 billion in assets
under management. The Advisor, State Street Bank and Trust Company (State
Street) and other advisory affiliates of State Street make up State Street
Global Advisors (SSgA), the investment management arm of State Street
Corporation. With over $910 billion under management as of July 31, 2003, SSgA
provides complete global investment management services from offices in North
America, South America, Europe, Asia, Australia and the Middle East. State
Street, a 200-year old pioneer and leader in the world of financial services, is
one of the largest providers of securities processing and record keeping
services for US mutual funds and pension funds.
For these services, the fund pays the Advisor an annual management fee,
calculated daily and paid monthly, of 0.10%, after fee waiver and reimbursement,
of the average daily net asset value of the fund.
ADDITIONAL INFORMATION ABOUT THE FUND'S
OBJECTIVES, INVESTMENT STRATEGIES AND RISKS
The investment policies described below reflect the fund's current practices.
Risk information related to the investment instrument or strategy described
below is contained in the Principal Risks section. Additional risk information
applicable to the instrument or strategy is also described below. Please read
the Principal Risks section carefully. There can be no assurance that these
investment policies will ensure achievement of the fund's investment objective.
QUALITY OF SECURITIES. The fund will limit its portfolio investments to those
United States dollar-denominated instruments which at the time of acquisition
the Advisor determines present minimal credit risk and which qualify as
"eligible" securities under the Securities and Exchange Commission rules
applicable to money market mutual funds. In general, eligible securities include
securities that: (1) are rated in the highest category by at least two
nationally recognized statistical rating organizations ("NRSRO"); (2) by one
NRSRO, if only one rating service has rated the security; or (3) if unrated, are
of comparable quality, as determined by the Fund's Advisor in accordance with
procedures established by the Board of Trustees.
PORTFOLIO MATURITY. A money market fund must limit its investments to securities
with remaining maturities determined in accordance with applicable SEC
regulations and must maintain a dollar-weighted average maturity of 90 days or
less. A fund will normally hold portfolio instruments to maturity, but may
dispose of them prior to maturity if the Advisor finds it advantageous or
necessary. Investing in short-term money market instruments will result in high
portfolio turnover. Since the cost of these transactions is small, high turnover
is not expected to adversely affect a fund's price or yield.
VARIABLE AND FLOATING RATE SECURITIES. The fund may purchase variable and
floating rate securities which are instruments issued or guaranteed by entities
such as the: (1) US government, or an agency or instrumentality thereof, (2)
corporations, (3) financial institutions, (4) insurance companies or (5) trusts.
A variable rate security provides for the automatic establishment of a new
interest rate on set dates. Variable rate obligations whose interest is
readjusted no less frequently than annually will be deemed to have a maturity
equal to the period remaining until the next readjustment of the interest rate.
The fund may also purchase floating rate securities. A floating rate security
provides for the automatic adjustment of its interest rate whenever a specified
interest rate changes. Interest rates on these securities are ordinarily tied
to, and are a percentage of, a widely recognized interest rate, such as the
yield on 90-day US Treasury bills or the prime rate of a specified bank.
Generally, changes in interest rates will have a smaller effect on the market
value of variable and floating rate securities than on the market value of
comparable fixed-income obligations. Thus, investing in variable and floating
rate securities generally allows less opportunity for capital appreciation and
depreciation than investing in comparable fixed-income securities.
Securities purchased by the fund may include variable and floating rate
instruments, which may have a stated maturity in excess of the fund's maturity
limitations but which will, except for certain US government obligations, permit
the fund to demand payment of the principal of the instrument at least once
every 13 months upon not more than 30 days' notice. Variable and floating rate
instruments
7
may include variable amount master demand notes that permit the indebtedness
thereunder to vary in addition to providing for periodic adjustments in the
interest rate. There may be no active secondary market with respect to a
particular variable or floating rate instrument. Nevertheless, the periodic
readjustments of their interest rates tend to assure that their value to the
fund will approximate their par value. Illiquid variable and floating rate
instruments (instruments which are not payable upon seven days' notice and do
not have an active trading market) that are acquired by the fund are subject to
the fund's percentage limitations regarding securities that are illiquid or not
readily marketable. The Advisor will continuously monitor the creditworthiness
of issuers of variable and floating rate instruments in which the Investment
Company invests, and their ability to repay principal and interest.
Variable and floating rate securities are subject to interest rate risk and
credit/default risk.
ASSET-BACKED SECURITIES. Asset-backed securities are securities whose principal
and interest payments are collateralized by pools of assets such as auto loans,
credit card receivables, leases, installment contracts and personal property.
Payments of principal and interest are passed through to holders of the
securities and are typically supported by some form of credit enhancement, such
as over collateralization, a letter of credit, surety bond, limited guarantee by
another entity or by priority to certain of the borrower's other securities. The
degree of credit enhancement varies, generally applying only until exhausted and
covering only a fraction of the security's par value. If the credit enhancement
of an asset-backed security held by a fund has been exhausted, and if any
required payments of principal and interest are not made with respect to the
underlying loans, the fund may experience loss or delay in receiving payment and
a decrease in the value of the security.
- Prepayment Risk--Like mortgage-backed securities, asset-backed securities
are often subject to more rapid repayment than their stated maturity date
would indicate as a result of the pass-through of prepayments of principal
on the underlying loans. During periods of declining interest rates,
prepayment of loans underlying asset-backed securities can be expected to
accelerate. A fund's ability to maintain positions in such securities will
be affected by reductions in the principal amount of such securities
resulting from prepayments, and its ability to reinvest the returns of
principal at comparable yields is subject to generally prevailing interest
rates at that time. To the extent that a fund invests in asset-backed
securities, the values of such fund's portfolio securities will vary with
changes in market interest rates generally and the differentials in yields
among various kinds of asset-backed securities.
- Other Risk Associated with Asset-Backed Securities--Asset-backed securities
present certain additional risks that are not presented by mortgage-backed
securities because asset-backed securities generally do not have the
benefit of a security interest in collateral that is comparable to mortgage
assets. Credit card receivables are generally unsecured and the debtors on
such receivables are entitled to the protection of a number of state and
federal consumer credit laws, many of which give such debtors the right to
set-off certain amounts owed on the credit cards, thereby reducing the
balance due. Automobile receivables generally are secured, but by
automobiles rather than residential real property. Most issuers of
automobile receivables permit the loan servicers to retain possession of
the underlying obligations. If the servicer were to sell these obligations
to another party, there is a risk that the purchaser would acquire an
interest superior to that of the holders of the asset-backed securities. In
addition, because of the large number of vehicles involved in a typical
issuance and technical requirements under state laws, the trustee for the
holders of the automobile receivables may not have a proper security
interest in the underlying automobiles. Therefore, there is the possibility
that, in some cases, recoveries on repossessed collateral may not be
available to support payments on these securities.
COMMERCIAL PAPER AND OTHER SHORT-TERM OBLIGATIONS. Commercial paper (including
variable amount master notes and funding agreements) are short-term promissory
notes issued by corporations, partnerships, trusts or other entities, to finance
short-term credit needs. Short-term obligations used by a fund include
non-convertible debt securities (e.g., bonds and debentures) with not more than
397 days (13 months) remaining to maturity at the time of purchase. Short-term
obligations issued by trusts may include, but are not limited to,
mortgage-related or asset-backed debt instruments, including pass-through
certificates such as participation in, or Treasury bonds or notes backed by,
pools of mortgages, or credit card, automobile or other types of receivables.
GOVERNMENT SECURITIES. US government securities include US Treasury bills,
notes, and bonds and other obligations issued or guaranteed as to interest and
principal by the US government and its agencies or instrumentalities.
Obligations issued or guaranteed as to interest and principal by the US
government, its agencies or instrumentalities include securities that are
supported by the full faith and credit of the United States Treasury, securities
that are supported by the right of the issuer to borrow from the United States
Treasury, discretionary authority of the US government agency or
instrumentality, and securities supported solely by the creditworthiness of the
issuer.
EURODOLLAR CERTIFICATES OF DEPOSIT (ECDs), EURODOLLAR TIME DEPOSITS (ETDs) AND
YANKEE CERTIFICATES OF DEPOSIT (YCDs). ECDs are US dollar-denominated
certificates of deposit issued by a bank outside of the United States. ETDs are
US dollar-denominated deposits in foreign branches of US banks and foreign
banks. YCDs are US dollar-denominated certificates of deposit issued by US
branches of foreign banks.
SECTION 4(2) COMMERCIAL PAPER. The fund may also invest in commercial paper
issued in reliance on the so-called private placement
8
exemption from registration afforded by Section 4(2) of the Securities Act of
1933 ("Section 4(2) paper"). Section 4(2) paper is restricted as to disposition
under the Federal securities laws and generally is sold to institutional
investors that agree that they are purchasing the paper for investment and not
with a view to public distribution. Any resale by the purchaser must be in an
exempt transaction. Section 4(2) paper normally is resold to other institutional
investors like the fund through or with the assistance of the issuer or
investment dealers that make a market in Section 4(2) paper. As a result it
suffers from a liquidity risk, the risk that the securities may be difficult to
value because of the absence of an active market and may be disposed of only
after considerable expense and delay. Section 4(2) paper will not be subject to
the fund's 10% limitation on illiquid securities set forth below where the Board
of Trustees of the Investment Company (pursuant to guidelines adopted by the
Board) determines that a liquid trading market exists.
REPURCHASE AGREEMENTS. A fund enters into repurchase agreements with banks and
other financial institutions, such as broker-dealers. In substance, a repurchase
agreement is a loan for which the fund receives securities as collateral. Under
a repurchase agreement, a fund purchases securities from a financial institution
that agrees to repurchase the securities at the fund's original purchase price
plus interest within a specified time. Repurchase transactions are limited to
those member banks of the Federal Reserve System and broker-dealers whose
creditworthiness the Advisor considers satisfactory. If the other party or
"seller" defaults, a fund might suffer a loss to the extent that the proceeds
from the sale of the underlying securities and other collateral held by the fund
are less than the repurchase price and the fund's cost associated with delay and
enforcement of the repurchase agreement. In addition, in the event of a
bankruptcy of the seller, a fund could suffer additional losses if a court
determines that the fund's interest in the collateral is not enforceable. In
evaluating whether to enter into a repurchase agreement, the Advisor will
carefully consider the creditworthiness of the seller. Distributions of the
income from repurchase agreements will be taxable to a fund's shareholders.
SHAREHOLDER INFORMATION
PURCHASE AND REDEMPTION OF SHARES
DISTRIBUTION AND ELIGIBLE INVESTORS. Shares of the SSgA Funds are offered
without a sales commission by State Street Global Markets, LLC (the
Distributor). Class T Shares may not be purchased by individuals directly, but
must be purchased through a third party financial institution which is permitted
by contract with the SSgA Funds to offer shares. The third party may be a bank,
broker, recordkeeper or advisor, and will be referred to in this prospectus as a
"Financial Intermediary." Only certain Financial Intermediaries are authorized
to receive purchase orders on the fund's behalf. The fund reserves the right to
reject any purchase order.
- If you have questions about SSgA Funds or the Class T Shares,
including questions about the investment objectives, strategies or
risks, please call the SSgA Funds toll-free at 1-800-647-7327. You may
also access information about the SSgA Funds online at
www.ssgafunds.com.
- If you have questions about your account or plan options, please
contact your Financial Intermediary.
TRANSACTIONS. Purchases, exchanges or redemptions of the fund's shares are
processed on any business day at the net asset value next determined after they
have been received by State Street Bank and Trust Company, the fund's Transfer
Agent, in good order (described below). A business day is one on which the New
York Stock Exchange is open for regular trading. The Federal Reserve is closed
on certain holidays on which the New York Stock Exchange is open. These holidays
are Columbus Day and Veteran's Day. On these holidays, you will not be able to
purchase shares by wiring federal funds because federal funds wiring does not
occur on these holidays. All purchases must be made in US dollars. Good order
means that your request includes complete information on your contribution,
exchange or redemption and that the Transfer Agent has received the appropriate
assets. In all cases, your transaction will be based on the fund's next
determined net asset value (NAV) after the Transfer Agent has received the order
from the Financial Intermediary. As long as this request is received prior to
the close of the regular trading session of the New York Stock Exchange,
ordinarily 4 p.m. Eastern time, you will receive that day's NAV. If a request is
received on a non-business day or after the close of the New York Stock
Exchange, the order will be effective on the next business day.
Financial Intermediaries may charge investors fees for certain services.
Investors should contact the Financial Intermediary for information concerning
what additional fees, if any, may be charged.
The Financial Intermediary is required by law to obtain certain personal
information from you that it will use to verify your identity. If you do not
provide the information, the Financial Intermediary may not be able to open your
account. If the Financial Intermediary is unable to verify your identity, it may
reserve the right to close your account or take such other reasonable steps. The
SSgA Funds and the Financial Intermediaries reserve the right to reject any
purchase order.
INVESTMENT OPTIONS AND ALLOCATIONS. Your plan's specific provisions may allow
you to change your investment selections, the
9
amount of your contributions, or how your contributions are allocated among the
investment choices available to you. Contact your Financial Intermediary for
more details.
MINIMUM INITIAL AND SUBSEQUENT INVESTMENTS; BENEFICIAL OWNERSHIP. Each Financial
Intermediary may set a minimum initial investment for its customers and may
redeem all shares in an investor's account if the value of the account falls
below a predetermined amount. Please refer to materials provided by your
Financial Intermediary for more information. Beneficial ownership of shares will
be recorded by the Financial Intermediary and reflected in account statements
provided to their customers.
AUTOMATIC SWEEP. Your Financial Intermediary may offer an automatic sweep for
the fund shares in the operation of brokerage cash accounts for its customers.
Contact your Financial Intermediary to determine the availability and the
parameters of an automatic cash sweep.
EXCHANGES. The exchange privilege (your ability to redeem shares from one fund
to purchase shares of another fund) may be available to you through your
Financial Intermediary. The fund is not intended for excessive trading or market
timing. Excessive trading disrupts portfolio management and drives fund expenses
higher. Although the SSgA Funds make every effort to maintain the exchange
privilege, the fund reserves the right to revise or terminate this privilege,
limit the amount of an exchange, or reject any exchange, at any time, without
notice. Of course, your right to redeem shares would be unaffected by these
restrictions. An exchange is a taxable transaction (except for qualified plan
accounts).
Before making an exchange to or from another fund available in your plan or
through your Financial Intermediary, consider the following:
- Certain investment options, particularly funds made up of company
stock or investment contracts, may be subject to unique restrictions.
- Be sure to read that fund's prospectus.
- You must meet the minimum investment amount, if any, of each fund.
- The SSgA Funds can accept exchanges only as permitted by your plan.
Contact your Financial Intermediary for details on the exchange
policies that apply to your plan.
REDEMPTIONS. Redemptions, like purchases, may be effected only through Financial
Intermediaries. Please contact your Financial Intermediary or refer to the
appropriate plan documents for details.
Shares of the funds may be redeemed on any business day. A business day is one
on which the New York Stock Exchange is open for regular trading. The Federal
Reserve is closed on certain holidays on which the New York Stock Exchange is
open. These holidays are Columbus Day and Veteran's Day. On these holidays,
redemption proceeds ordinarily will be sent the next business day. Redemptions
are processed at the NAV next calculated after receipt and acceptance of the
redemption order by the fund or its agent. Redemptions proceeds, less any
applicable redemption fees, will normally be wired to the Financial Intermediary
following receipt of the redemption order, but in no event later than seven days
after receipt of such order. Contact your Financial Intermediary regarding
receipt of redemption proceeds with respect to your account.
EMERGENCY CONDITIONS. The SSgA Funds reserve the right to suspend the right of
redemption, or postpone the date of payment for more than seven days, if
emergency conditions should exist, as specified in the 1940 Act or as determined
by the Securities and Exchange Commission.
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS
The SSgA Funds have adopted a distribution plan with respect to the Class T
Shares pursuant to Rule 12b-1 (the Plan) under the 1940 Act. The Plan allows a
fund to pay fees for the sale and distribution of fund shares and for services
provided to shareholders by the Distributor or other Financial Intermediaries.
Because these fees are paid out of fund assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than
paying other types of sales charges. Payments to the Distributor for
distribution, marketing, shareholder and administrative services provided to a
fund by the Distributor or a Financial Intermediary are not permitted by the
Plan to exceed 0.55% of a fund's average net asset value per year. The
Distributor pays Financial Intermediaries for shareholder and administrative
services provided to a fund out of the fee the Distributor receives from the
fund. Fees paid to Financial Intermediaries providing shareholder services to
the fund are not permitted by the Plan to exceed .50% of the fund's average net
asset value per year. Any payments that are required to be made to the
Distributor or Financial Intermediaries that cannot be made because of the
limitations contained in the Plan may be carried forward and paid in the
following two fiscal years so long as the Plan is in effect. The fund also
offers the Institutional Class of shares through the Distributor to
institutional and retail
10
investors which invest for their own account or in a fiduciary or agency
capacity. The Institutional Class has a separate Rule 12b-1 Plan and is not
subject to the fees and expenses of the Plan described above.
Long-term shareholders of the fund may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.
Class T Shares are offered without imposition of a front end sales load or
contingent deferred sales load. Class T Shares are subject to distribution
and/or shareholder servicing fees and expenses payable under the Plan. Class T
Shares are offered for sale only to investors meeting the eligibility
requirements disclosed in this prospectus and are offered only through Financial
Intermediaries.
PRICING OF FUND SHARES
The fund determines the price per share once each business day at 4 p.m. Eastern
time.
A business day is one on which the New York Stock Exchange is open. The price
per share of the fund is computed by adding the value of all securities and
other assets of the fund, deducting accrued liabilities, dividing by the number
of shares outstanding and rounding to the nearest cent. Pricing does not occur
on non-business days.
The fund seeks to maintain a $1.00 per share net asset value and, accordingly,
uses the amortized cost valuation method to value its portfolio instruments. The
amortized cost valuation method initially prices an instrument at its cost and
thereafter assumes a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument.
DIVIDENDS AND DISTRIBUTIONS
The Board of Trustees intends to declare dividends on shares of the fund from
net investment income daily and have them payable as of the last business day of
each month. Distributions will be made at least annually from net short- and
long-term capital gains, if any. In most instances, distributions will be
declared and paid in mid-October with additional distributions declared and paid
in December, if required, for the Fund to avoid imposition of a 4% federal
excise tax on undistributed capital gains. The fund does not expect any material
long-term capital gains or losses.
Dividends declared in October, November or December and payable to shareholders
of record in such months will be deemed for Federal income tax purposes to have
been paid by the fund and received by shareholders on December 31 of that year
if the dividend is paid prior to February 1 of the following year.
Income dividends and capital gains distributions will be paid in additional
shares at their net asset value on the record date unless you have elected to
receive them in cash. You may make this election by giving 30 days' written
notice to the Transfer Agent. If it is determined that the US Postal Service
cannot properly deliver fund mailings to you, or if a check remains uncashed for
at least six months, the cash election will be changed automatically. Future
dividends and other distributions will be reinvested in additional shares of the
relevant fund until you notify the SSgA Funds in writing of the correct address.
You must also request in writing that the election to receive dividends and
other distributions in cash be reinstated. In addition, following the six-month
period, any undeliverable or uncashed checks will be cancelled and the amounts
will be reinvested in the relevant fund at the per share net asset value
determined as of the date of cancellation of the checks. No interest will accrue
on the amounts represented by the uncashed distribution or redemption checks.
Any dividend or capital gain distribution paid by the fund shortly after a
purchase of shares will reduce the per share net asset value of the fund by the
amount of the dividend or distribution. In effect, the payment will represent a
return of capital to the shareholder. However, you will be subject to taxes with
respect to such dividend or distribution.
DISTRIBUTION OPTION. You can choose from three different distribution options as
indicated on the Application:
- Reinvestment Option--Dividends and capital gains distributions will be
automatically reinvested in additional shares of the fund. If you do
not indicate a choice on the Application, this option will be
automatically assigned.
- Income-Earned Option--Capital gain distributions will be automatically
reinvested, but a check or wire will be sent for each dividend
distribution.
- Cash Option--A wire will be sent for each dividend and capital gain
distribution. Distributions will be sent to a pre-designated bank by
the payable date.
The Transfer Agent will wire dividends (if that option is elected) to a
pre-designated bank by the first business day of the following month in which
the dividend is payable. Investors are urged to verify with their bank whether
it charges a fee to accept this wire.
If Cash Option has been selected and the account is closed anytime during the
month, the dividends will automatically be wired the following business day
after the redemption to the bank where the redemption wire was sent. If an
account is closed during the month and dividends were to be reinvested, the
proceeds will automatically be sent by check to the address of record.
11
TAXES
As with any investment, you should consider the tax consequences of investing in
the funds. Any time you sell or exchange shares of a fund in a taxable account,
it is considered a taxable event. Depending on the purchase price and the sale
price, you may have a gain or loss on the transaction. Any tax liabilities
generated by your transactions are your responsibility.
The following discussion does not apply to tax-deferred accounts, nor is it a
complete analysis of the federal tax implications of investing in the funds. You
should consult your own tax advisor if you have any questions. Additionally,
state or local taxes may apply to your investment, depending upon the laws of
your state of residence.
TAXES ON DISTRIBUTIONS. Dividends and distributions of the fund are subject to
federal income tax, regardless of whether the distribution is made in cash or
reinvested in additional shares of a fund. Distributions may be taxable at
different rates depending on the length of time a fund holds a security. In
certain states, a portion of the dividends and distributions (depending on the
sources of a fund's income) may be exempt from state and local taxes.
Information regarding the tax status of income dividends and capital gains
distributions will be mailed to shareholders on or before January 31 of each
year. Your Financial Intermediary will provide this information to you. Account
tax information will also be sent to the IRS.
Income dividends or capital gains distributions made by a fund purchased through
a qualified retirement plan will generally be exempt from current taxation if
left to accumulate within the qualified plan. Generally, withdrawals from
qualified plans may be subject to ordinary income tax and, if made before age
59-1/2, a 10% penalty tax. The tax status of your investment depends on the
features of your qualified plan. For further information, please contact your
Financial Intermediary.
TAXATION OF THE FUND. The fund intends to qualify as a regulated investment
company (RIC) under Subchapter M of the Internal Revenue Code of 1986, as
amended (the Code). As a RIC, the fund will not be subject to federal income
taxes to the extent it distributes its net investment income and net capital
gain (long-term capital gins in excess of short-term capital losses) to
shareholders. The board intends to distribute each year substantially all of the
fund's net investment income and net capital gain. It is important that the fund
meets these requirements so that any earnings on your investment will not be
taxed twice.
12
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand a fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in a fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the fund's financial statements, are included in the annual report, which
is available upon request by calling the Distributor at 1-800-647-7327.
The returns and all other information shown below are for the Institutional
Class of the fund that is not offered in this prospectus. The annual returns
for the Class T Shares offered in this prospectus would be lower due to
higher distribution and service (12b-1) fees of the Class T Shares.

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(1) For the six months ended February 28, 2003 (Unaudited).
(2) Periods less than one year are not annualized.
(3) The ratios for periods less than one year are not annualized.
(4) See Note 3 of the Semi Annual Report for current period amounts.
13
ADDITIONAL INFORMATION ABOUT THE SSgA FUNDS
CLASS T SHAREHOLDERS: For shareholder inquiries regarding your Class T Shares or
to request additional information on the Class T Shares offered in this
prospectus, including the fund's Statement of Additional Information, annual or
semi-annual report, please contact your Financial Intermediary.
Statements of Additional Information (SAI) include additional information about
the fund. The fund's SAI is incorporated into this prospectus by reference and
is available, without charge, upon request. Additional information about the
fund's investments is available in the fund's annual and semi-annual reports to
shareholders. In the fund's annual report you will find a discussion of the
market conditions and investment strategies that significantly affected the
fund's performance during its last fiscal year. To request an SAI, annual or
semi-annual report, or other information about a fund, please contact:
State Street Global Markets, LLC
State Street Financial Center
One Lincoln Street
Boston, Massachusetts 02111-2900
1-800-997-7327
The prospectuses, SAIs and annual and semi-annual reports are also available on
the SSgA Funds' website at www.ssgafunds.com.
You can review and copy information about the fund, including the SAI, at the
Securities and Exchange Commission's Public Reference Room in Washington, D.C.
You can receive information on the operation of the Public Reference Room by
calling 1-202-942-8090. Reports and other information about the SSgA Funds are
available on the EDGAR database on the Commission's internet site at
http://www.sec.gov, and copies also may be obtained, upon payment of a
duplicating fee, by electronic request at the following e-mail address:
publicinfo@sec.gov, or by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102.
SSgA Funds' Investment Company Act File No. 811-5430
14
Filed pursuant to Rule 485(b)
File Nos. 33-19229; 811-5430
SSgA FUNDS
State Street Financial Center
One Lincoln Street
Boston, Massachusetts 02111-2900
1-800-997-7327
www.ssgafunds.com
SSgA US TREASURY MONEY MARKET FUND
CLASS T SHARES
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NEITHER
DETERMINED THAT THE INFORMATION IN THIS PROSPECTUS IS ACCURATE AND COMPLETE, NOR
APPROVED OR DISAPPROVED OF THESE SECURITIES. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The US Treasury Money Market Fund seeks to maximize current income, to the
extent consistent with the preservation of capital and liquidity and the
maintenance of a stable $1.00 per share net asset value, by investing in
obligations that are issued or guaranteed as to principal and interest by the US
Government and repurchase agreements backed by such securities.
Class T Shares of the US Treasury Money Market Fund may not be purchased by
individuals directly, but must be purchased through a financial institution
which is permitted by contract with the fund to offer shares (the Financial
Intermediary). This prospectus should be read together with any materials
provided by the Financial Intermediary.
PROSPECTUS DATED AUGUST 25, 2003
1
TABLE OF CONTENTS

2
INVESTMENT STRATEGIES AND PRINCIPAL RISKS
INVESTMENT OBJECTIVE
The US Treasury Money Market Fund seeks to maximize current income, to the
extent consistent with the preservation of capital and liquidity and the
maintenance of a stable $1.00 per share net asset value, by investing in
obligations that are issued or guaranteed as to principal and interest by the US
Government and repurchase agreements backed by such securities.
The fund is a diversified company under the Investment Company Act of 1940, as
amended (the 1940 Act). The investment objective of the fund may be changed only
with the approval of a majority of the fund's shareholders as defined in the
1940 Act. SSgA Funds Management, Inc. (the Advisor), serves as the fund's
investment advisor.
PRINCIPAL INVESTMENT STRATEGIES
The fund's investment policy is to invest its assets primarily in US Treasury
bills, notes and bonds (which are direct obligations of the US Government) and
repurchase agreements backed by such securities. The fund will invest no more
than 10% of its net assets (taken at current market value) in repurchase
agreements maturing in more than seven days. Under normal market conditions, the
US Treasury Money Market Fund will be 100% invested in such securities, but in
no event less than 80%. Shareholders will be notified 60 days prior to changing
the 80% investment policy.
Fund managers base their decisions on the relative attractiveness of different
money market investments which can vary depending on the general level of
interest rates as well as supply and demand imbalances in the market. Because
the fund intends to meet its investment objective by investing only in US
Treasury bills, notes and bonds, its return may be less than a fund which can
invest without limitation in all types of securities.
PRINCIPAL RISKS OF INVESTING IN THE FUND
The following is an alphabetized description of the principal risks associated
with an investment in the fund. For additional information concerning the
instruments and investment techniques identified in these descriptions, see
"Additional Information about the Fund's Objectives, Investment Strategies and
Risks."
GOVERNMENT SECURITIES RISK. Unlike securities issued by the US Treasury,
securities issued by US government agencies and instrumentalities are subject to
the risk that the US government will not provide financial support to such
agencies or instrumentalities if it is not obligated to do so by law.
Investments in US government securities may return less than investments in
non-government fixed income securities.
INTEREST RATE RISK. During periods of rising interest rates, a fund's yield (and
the market value of its securities) will tend to be lower than prevailing market
rates; in periods of falling interest rates, a fund's yield (and the value of
its securities) will tend to be higher than prevailing market rates. The longer
the duration of the security, the more sensitive the security is to this risk.
Securities with longer maturities and the securities of issuers in the financial
services sector can be more sensitive to interest rate changes than securities
with shorter maturities. Short-term securities tend to react to changes in
short-term interest rates. A 1% increase in interest rates would reduce the
value of a $100 note by approximately one dollar if it had a one year duration,
but would reduce its value by approximately fifteen dollars if it had a 15 year
duration.
3
MARKET RISK. The value of the securities in which a fund invests may go up or
down in response to the prospects of individual companies and/or general
economic conditions. Price changes may be temporary or may last for extended
periods.
MONEY MARKET RISK. The risk that a fund will not be able to maintain a NAV per
share of $1.00 at all times. Although a money market fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in a money market fund. An investment in a money market fund is not a
deposit of any bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
4
RISK AND RETURN
The following bar chart illustrates the risks of investing in the fund by
showing changes in the fund's performance from year to year over the life of the
fund. A fund's past performance is not necessarily an indication of how the fund
will perform in the future.
The returns and all other information shown below are for the original SSgA
Fund class (referred to in this prospectus as the "Institutional Class") that
is not offered in this prospectus. The annual returns for the Class T Shares
offered in this prospectus would be lower due to higher distribution and
service (12b-1) fees of the Class T Shares.

Best Quarter - June 30, 1995: 1.51%
Worst Quarter - December 31, 2002: 0.33%
Year-to-Date - June 30, 2003: 0.52%
The following table further illustrates the risks of investing in the fund by
showing how the fund's average annual returns for 1 and 5 years and since the
fund's inception compare to the returns of a broad-based securities market
comparison (returns shown reflect no deductions for fees, taxes or expenses).
The average annual total returns for the Class T Shares offered in this
prospectus would differ only to the extent that the Institutional Class and
Class T Shares of the SSgA Funds do not have the same expenses.
Average Annual Total Returns
For the Periods Ended December 31, 2002:

* The fund began operating on December 1, 1993. The returns would have been
lower without the contractual expense reimbursement.
7-Day Yields
For the Period Ended December 31, 2002:

CURRENT EFFECTIVE
US Treasury Money Market Fund 1.10% 1.27%

Current yield information for the fund is available toll free by calling
1-800-647-7327 or by visiting our website at www.ssgafunds.com.
5
6
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)

----------
(1) The Advisor has contractually agreed to waive .15% of its .25% management
fee until December 31, 2010. Also, the Advisor has contractually agreed to
reimburse the fund for all expenses to the extent that total expenses exceed
.80% of average daily net assets on an annual basis until December 31, 2004. The
annual management fee after waiver and reimbursement is .10%.
7
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS.
THE EXAMPLE ASSUMES THAT YOU INVEST $10,000 IN THE FUND FOR THE TIME PERIODS
INDICATED, AND THEN REDEEM ALL OF YOUR SHARES AT THE END OF THOSE PERIODS. THE
EXAMPLE ALSO ASSUMES THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR, THAT ALL
DIVIDENDS AND DISTRIBUTIONS ARE REINVESTED, AND THAT THE FUND'S OPERATING
EXPENSES REMAIN THE SAME. ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER,
BASED ON THESE ASSUMPTIONS, YOUR COSTS WOULD BE:

Investors purchasing fund shares through a financial intermediary, such as a
bank or an investment advisor, may also be required to pay additional fees for
services provided by the intermediary. Such investors should contact the
intermediary for information concerning what additional fees, if any, will be
charged.
8
MANAGEMENT OF THE FUND
INVESTMENT ADVISOR. SSgA Funds Management, Inc. (the Advisor), State Street
Financial Center, One Lincoln Street, Boston, Massachusetts 02111-2900, serves
as the investment advisor for the SSgA Funds and directs the Funds' investments
in accordance with each fund's investment objective, policies and restrictions.
The Advisor is registered with the Securities and Exchange Commission as an
investment advisor under the Investment Advisers Act of 1940 and is a wholly
owned subsidiary of State Street Corporation, a publicly held bank holding
company. As of July 31, 2003, the Advisor had over $75 billion in assets
under management. The Advisor, State Street Bank and Trust Company (State
Street) and other advisory affiliates of State Street make up State Street
Global Advisors (SSgA), the investment management arm of State Street
Corporation. With over $910 billion under management as of July 31, 2003, SSgA
provides complete global investment management services from offices in North
America, South America, Europe, Asia, Australia and the Middle East. State
Street, a 200-year old pioneer and leader in the world of financial services, is
one of the largest providers of securities processing and record keeping
services for US mutual funds and pension funds.
For these services, the fund pays the Advisor an annual management fee,
calculated daily and paid monthly, of 0.10%, after fee waiver and reimbursement,
of the average daily net asset value of the fund.
ADDITIONAL INFORMATION ABOUT THE FUND'S
OBJECTIVES, INVESTMENT STRATEGIES AND RISKS
The investment policies described below reflect the fund's current practices.
Risk information related to the investment instrument or strategy described
below is contained in the Principal Risks section. Additional risk information
applicable to the instrument or strategy is also described below. Please read
the Principal Risks section carefully. There can be no assurance that these
investment policies will ensure achievement of the fund's investment objective.
GOVERNMENT SECURITIES. US government securities include US Treasury bills,
notes, and bonds and other obligations issued or guaranteed as to interest and
principal by the US government and its agencies or instrumentalities.
Obligations issued or guaranteed as to interest and principal by the US
government, its agencies or instrumentalities include securities that are
supported by the full faith and credit of the United States Treasury, securities
that are supported by the right of the issuer to borrow from the United States
Treasury, discretionary authority of the US government agency or
instrumentality, and securities supported solely by the creditworthiness of the
issuer.
PORTFOLIO MATURITY. A money market fund must limit its investments to securities
with remaining maturities determined in accordance with applicable SEC
regulations and must maintain a dollar-weighted average maturity of 90 days or
less. A fund will normally hold portfolio instruments to maturity, but may
dispose of them prior to maturity if the Advisor finds it advantageous or
necessary. Investing in short-term money market instruments will result in high
portfolio turnover. Since the cost of these transactions is small, high turnover
is not expected to adversely affect a fund's price or yield.
REPURCHASE AGREEMENTS. A fund enters into repurchase agreements with banks and
other financial institutions, such as broker-dealers. In substance, a repurchase
agreement is a loan for which the fund receives securities as collateral. Under
a repurchase agreement, a fund purchases securities from a financial institution
that agrees to repurchase the securities at the fund's original purchase price
plus interest within a specified time. Repurchase transactions are limited to
those member banks of the Federal Reserve System and broker-dealers whose
creditworthiness the Advisor considers satisfactory. If the other party or
"seller" defaults, a fund might suffer a loss to the extent that the proceeds
from the sale of the underlying securities and other collateral held by the fund
are less than the repurchase price and the fund's cost associated with delay and
enforcement of the repurchase agreement. In addition, in the event of a
bankruptcy of the seller, a fund could suffer additional losses if a court
determines that the fund's interest in the collateral is not enforceable. In
evaluating whether to enter into a repurchase agreement, the Advisor will
carefully consider the creditworthiness of the seller. Distributions of the
income from repurchase agreements will be taxable to a fund's shareholders.
VARIABLE AND FLOATING RATE SECURITIES. The fund may purchase variable and
floating rate securities which are instruments issued or guaranteed by entities
such as the: (1) US government, or an agency or instrumentality thereof, (2)
corporations, (3) financial institutions, (4) insurance companies or (5) trusts.
A variable rate security provides for the automatic establishment of a new
interest rate on set dates. Variable rate obligations whose interest is
readjusted no less frequently than annually will be deemed to have a
9
maturity equal to the period remaining until the next readjustment of the
interest rate. The fund may also purchase floating rate securities. A floating
rate security provides for the automatic adjustment of its interest rate
whenever a specified interest rate changes. Interest rates on these securities
are ordinarily tied to, and are a percentage of, a widely recognized interest
rate, such as the yield on 90-day US Treasury bills or the prime rate of a
specified bank. Generally, changes in interest rates will have a smaller effect
on the market value of variable and floating rate securities than on the market
value of comparable fixed-income obligations. Thus, investing in variable and
floating rate securities generally allows less opportunity for capital
appreciation and depreciation than investing in comparable fixed-income
securities.
Securities purchased by the fund may include variable and floating rate
instruments, which may have a stated maturity in excess of the fund's maturity
limitations but which will, except for certain US government obligations, permit
the fund to demand payment of the principal of the instrument at least once
every 13 months upon not more than 30 days' notice. Variable and floating rate
instruments may include variable amount master demand notes that permit the
indebtedness thereunder to vary in addition to providing for periodic
adjustments in the interest rate. There may be no active secondary market with
respect to a particular variable or floating rate instrument. Nevertheless, the
periodic readjustments of their interest rates tend to assure that their value
to the fund will approximate their par value. Illiquid variable and floating
rate instruments (instruments which are not payable upon seven days' notice and
do not have an active trading market) that are acquired by the fund are subject
to the fund's percentage limitations regarding securities that are illiquid or
not readily marketable. The Advisor will continuously monitor the
creditworthiness of issuers of variable and floating rate instruments in which
the Investment Company invests, and their ability to repay principal and
interest.
Variable and floating rate securities are subject to interest rate risk and
credit/default risk.
CASH SWEEP PROGRAM. Pursuant to the terms and conditions of an SEC exemptive
order and IRS private letter ruling, the SSgA Funds may participate in a Cash
Sweep Program. In the Cash Sweep Program, uninvested cash balances of
Participating Funds are used to purchase shares of Central Funds. Central Funds
are the Money Market and US Government Money Market Funds. Participating Funds
are portfolios of the SSgA Funds other than the Central Funds. The Cash Sweep
Program reduces the risk of counterparty default on repurchase agreements and
the market risk associated with direct purchases of short-term obligations,
while providing high current money market rates of return, ready liquidity and
increased diversity of holdings. Shares of a Central Fund sold to and redeemed
from a Participating Fund will not be subject to a sales load, redemption fee,
distribution fee or service fee. If Central Fund shares sold to or redeemed from
a Participating Fund are subject to any such distribution or service fee, the
Advisor will waive its advisory fee for each Participating Fund in an amount
that offsets the amount of such distribution and/or service fees incurred by the
Participating Fund. The uninvested cash invested in a Central Fund may not
exceed 25% of any Participating Fund's total assets. For purposes of this
limitation, each Participating Fund will be treated as a separate investment
company.
SHAREHOLDER INFORMATION
PURCHASE AND REDEMPTION OF SHARES
DISTRIBUTION AND ELIGIBLE INVESTORS. Shares of the SSgA Funds are offered
without a sales commission by State Street Global Markets, LLC (the
Distributor). Class T Shares may not be purchased by individuals directly, but
must be purchased through a third party financial institution which is permitted
by contract with the SSgA Funds to offer shares. The third party may be a bank,
broker, recordkeeper or advisor, and will be referred to in this prospectus as a
"Financial Intermediary." Only certain Financial Intermediaries are authorized
to receive purchase orders on the fund's behalf. The fund reserves the right to
reject any purchase order.
- If you have questions about SSgA Funds or the Class T Shares,
including questions about the investment objectives, strategies or
risks, please call the SSgA Funds toll-free at 1-800-647-7327. You may
also access information about the SSgA Funds online at
www.ssgafunds.com.
- If you have questions about your account or plan options, please
contact your Financial Intermediary.
TRANSACTIONS. Purchases, exchanges or redemptions of the fund's shares are
processed on any business day at the net asset value next determined after they
have been received by State Street Bank and Trust Company, the fund's Transfer
Agent, in good order (described below). A business day is one on which the New
York Stock Exchange is open for regular trading. The Federal Reserve is closed
on certain holidays on which the New York Stock Exchange is open. These holidays
are Columbus Day and Veteran's Day. On these holidays, you will not be able to
purchase shares by wiring federal funds because federal funds wiring does not
occur on these holidays. All purchases must be made in US dollars. Good order
means that your request includes complete information on your contribution,
exchange or redemption and that the Transfer Agent has received the appropriate
assets. In all cases, your transaction will be based on the fund's next
determined net asset value (NAV) after the Transfer Agent has received the order
from the Financial Intermediary. As long as this request is received prior to
the close of the regular trading session of the New York Stock Exchange,
10
ordinarily 4 p.m. Eastern time, you will receive that day's NAV. If a request is
received on a non-business day or after the close of the New York Stock
Exchange, the order will be effective on the next business day.
Financial Intermediaries may charge investors fees for certain services.
Investors should contact the Financial Intermediary for information concerning
what additional fees, if any, may be charged.
The Financial Intermediary is required by law to obtain certain personal
information from you that it will use to verify your identity. If you do not
provide the information, the Financial Intermediary may not be able to open your
account. If the Financial Intermediary is unable to verify your identity, it may
reserve the right to close your account or take such other reasonable steps. The
SSgA Funds and the Financial Intermediaries reserve the right to reject any
purchase order.
INVESTMENT OPTIONS AND ALLOCATIONS. Your plan's specific provisions may allow
you to change your investment selections, the amount of your contributions, or
how your contributions are allocated among the investment choices available to
you. Contact your Financial Intermediary for more details.
MINIMUM INITIAL AND SUBSEQUENT INVESTMENTS; BENEFICIAL OWNERSHIP. Each Financial
Intermediary may set a minimum initial investment for its customers and may
redeem all shares in an investor's account if the value of the account falls
below a predetermined amount. Please refer to materials provided by your
Financial Intermediary for more information. Beneficial ownership of shares will
be recorded by the Financial Intermediary and reflected in account statements
provided to their customers.
AUTOMATIC SWEEP. Your Financial Intermediary may offer an automatic sweep for
the fund shares in the operation of brokerage cash accounts for its customers.
Contact your Financial Intermediary to determine the availability and the
parameters of an automatic cash sweep.
EXCHANGES. The exchange privilege (your ability to redeem shares from one fund
to purchase shares of another fund) may be available to you through your
Financial Intermediary. The fund is not intended for excessive trading or market
timing. Excessive trading disrupts portfolio management and drives fund expenses
higher. Although the SSgA Funds make every effort to maintain the exchange
privilege, the fund reserves the right to revise or terminate this privilege,
limit the amount of an exchange, or reject any exchange, at any time, without
notice. Of course, your right to redeem shares would be unaffected by these
restrictions. An exchange is a taxable transaction (except for qualified plan
accounts).
Before making an exchange to or from another fund available in your plan or
through your Financial Intermediary, consider the following:
- Certain investment options, particularly funds made up of company
stock or investment contracts, may be subject to unique restrictions.
- Be sure to read that fund's prospectus.
- You must meet the minimum investment amount, if any, of each fund.
- The SSgA Funds can accept exchanges only as permitted by your plan.
Contact your Financial Intermediary for details on the exchange
policies that apply to your plan.
REDEMPTIONS. Redemptions, like purchases, may be effected only through Financial
Intermediaries. Please contact your Financial Intermediary or refer to the
appropriate plan documents for details.
Shares of the funds may be redeemed on any business day. A business day is one
on which the New York Stock Exchange is open for regular trading. The Federal
Reserve is closed on certain holidays on which the New York Stock Exchange is
open. These holidays are Columbus Day and Veteran's Day. On these holidays,
redemption proceeds ordinarily will be sent the next business day. Redemptions
are processed at the NAV next calculated after receipt and acceptance of the
redemption order by the fund or its agent. Redemptions proceeds, less any
applicable redemption fees, will normally be wired to the Financial Intermediary
following receipt of the redemption order, but in no event later than seven days
after receipt of such order. Contact your Financial Intermediary regarding
receipt of redemption proceeds with respect to your account.
EMERGENCY CONDITIONS. The SSgA Funds reserve the right to suspend the right of
redemption, or postpone the date of payment for more than seven days, if
emergency conditions should exist, as specified in the 1940 Act or as determined
by the Securities and Exchange Commission.
11
DISTRIBUTION SERVICES AND SHAREHOLDER SERVICING ARRANGEMENTS
The SSgA Funds have adopted a distribution plan with respect to the Class T
Shares pursuant to Rule 12b-1 (the Plan) under the 1940 Act. The Plan allows a
fund to pay fees for the sale and distribution of fund shares and for services
provided to shareholders by the Distributor or other Financial Intermediaries.
Because these fees are paid out of fund assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than
paying other types of sales charges. Payments to the Distributor for
distribution, marketing, shareholder and administrative services provided to a
fund by the Distributor or a Financial Intermediary are not permitted by the
Plan to exceed 0.55% of a fund's average net asset value per year. The
Distributor pays Financial Intermediaries for shareholder and administrative
services provided to a fund out of the fee the Distributor receives from the
fund. Fees paid to Financial Intermediaries providing shareholder services to
the fund are not permitted by the Plan to exceed .50% of the fund's average net
asset value per year. Any payments that are required to be made to the
Distributor or Financial Intermediaries that cannot be made because of the
limitations contained in the Plan may be carried forward and paid in the
following two fiscal years so long as the Plan is in effect. The fund also
offers the Institutional Class of shares through the Distributor to
institutional and retail investors which invest for their own account or in a
fiduciary or agency capacity. The Institutional Class has a separate Rule 12b-1
Plan and is not subject to the fees and expenses of the Plan described above.
Long-term shareholders of the fund may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.
Class T Shares are offered without imposition of a front end sales load or
contingent deferred sales load. Class T Shares are subject to distribution
and/or shareholder servicing fees and expenses payable under the Plan. Class T
Shares are offered for sale only to investors meeting the eligibility
requirements disclosed in this prospectus and are offered only through Financial
Intermediaries.
PRICING OF FUND SHARES
The fund determines the price per share once each business day at 3 p.m. Eastern
time.
A business day is one on which the New York Stock Exchange is open. The price
per share of the fund is computed by adding the value of all securities and
other assets of the fund, deducting accrued liabilities, dividing by the number
of shares outstanding and rounding to the nearest cent. Pricing does not occur
on non-business days.
The fund seeks to maintain a $1.00 per share net asset value and, accordingly,
uses the amortized cost valuation method to value its portfolio instruments. The
amortized cost valuation method initially prices an instrument at its cost and
thereafter assumes a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument.
DIVIDENDS AND DISTRIBUTIONS
The Board of Trustees intends to declare dividends on shares of the fund from
net investment income daily and have them payable as of the last business day of
each month. Distributions will be made at least annually from net short- and
long-term capital gains, if any. In most instances, distributions will be
declared and paid in mid-October with additional distributions declared and paid
in December, if required, for the Fund to avoid imposition of a 4% federal
excise tax on undistributed capital gains. The fund does not expect any material
long-term capital gains or losses.
Dividends declared in October, November or December and payable to shareholders
of record in such months will be deemed for Federal income tax purposes to have
been paid by the fund and received by shareholders on December 31 of that year
if the dividend is paid prior to February 1 of the following year.
Income dividends and capital gains distributions will be paid in additional
shares at their net asset value on the record date unless you have elected to
receive them in cash. You may make this election by giving 30 days' written
notice to the Transfer Agent. If it is determined that the US Postal Service
cannot properly deliver fund mailings to you, or if a check remains uncashed for
at least six months, the cash election will be changed automatically. Future
dividends and other distributions will be reinvested in additional shares of the
relevant fund until you notify the SSgA Funds in writing of the correct address.
You must also request in writing that the election to receive dividends and
other distributions in cash be reinstated. In addition, following the six-month
period, any undeliverable or uncashed checks will be cancelled and the amounts
will be reinvested in the relevant fund at the per share net asset value
determined as of the date of cancellation of the checks. No interest will accrue
on the amounts represented by the uncashed distribution or redemption checks.
Any dividend or capital gain distribution paid by the fund shortly after a
purchase of shares will reduce the per share net asset value of the fund by the
amount of the dividend or distribution. In effect, the payment will represent a
return of capital to the shareholder. However, you will be subject to taxes with
respect to such dividend or distribution.
DISTRIBUTION OPTION. You can choose from three different distribution options as
indicated on the Application:
- Reinvestment Option--Dividends and capital gains distributions will be
automatically reinvested in additional shares of the fund. If you do
not indicate a choice on the Application, this option will be
automatically assigned.
12
- Income-Earned Option--Capital gain distributions will be automatically
reinvested, but a check or wire will be sent for each dividend
distribution.
- Cash Option--A wire will be sent for each dividend and capital gain
distribution. Distributions will be sent to a pre-designated bank by
the payable date.
The Transfer Agent will wire dividends (if that option is elected) to a
pre-designated bank by the first business day of the following month in which
the dividend is payable. Investors are urged to verify with their bank whether
it charges a fee to accept this wire.
If Cash Option has been selected and the account is closed anytime during the
month, the dividends will automatically be wired the following business day
after the redemption to the bank where the redemption wire was sent. If an
account is closed during the month and dividends were to be reinvested, the
proceeds will automatically be sent by check to the address of record.
TAXES
As with any investment, you should consider the tax consequences of investing in
the funds. Any time you sell or exchange shares of a fund in a taxable account,
it is considered a taxable event. Depending on the purchase price and the sale
price, you may have a gain or loss on the transaction. Any tax liabilities
generated by your transactions are your responsibility.
The following discussion does not apply to tax-deferred accounts, nor is it a
complete analysis of the federal tax implications of investing in the funds. You
should consult your own tax advisor if you have any questions. Additionally,
state or local taxes may apply to your investment, depending upon the laws of
your state of residence.
TAXES ON DISTRIBUTIONS. Dividends and distributions of the fund are subject to
federal income tax, regardless of whether the distribution is made in cash or
reinvested in additional shares of a fund. Distributions may be taxable at
different rates depending on the length of time a fund holds a security. In
certain states, a portion of the dividends and distributions (depending on the
sources of a fund's income) may be exempt from state and local taxes.
Information regarding the tax status of income dividends and capital gains
distributions will be mailed to shareholders on or before January 31 of each
year. Your Financial Intermediary will provide this information to you. Account
tax information will also be sent to the IRS.
Income dividends or capital gains distributions made by a fund purchased through
a qualified retirement plan will generally be exempt from current taxation if
left to accumulate within the qualified plan. Generally, withdrawals from
qualified plans may be subject to ordinary income tax and, if made before age
59-1/2, a 10% penalty tax. The tax status of your investment depends on the
features of your qualified plan. For further information, please contact your
Financial Intermediary.
TAXATION OF THE FUND. The fund intends to qualify as a regulated investment
company (RIC) under Subchapter M of the Internal Revenue Code of 1986, as
amended (the Code). As a RIC, the fund will not be subject to federal income
taxes to the extent it distributes its net investment income and net capital
gain (long-term capital gins in excess of short-term capital losses) to
shareholders. The board intends to distribute each year substantially all of the
fund's net investment income and net capital gain. It is important that the fund
meets these requirements so that any earnings on your investment will not be
taxed twice.
13
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand a fund's
financial performance for the past 5 years. Certain information reflects
financial results for a single fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in a fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the fund's financial statements, are included in the annual report, which
is available upon request by calling the Distributor at 1-800-647-7327.
The returns and all other information shown below are for the Institutional
Class of the fund that is not offered in this prospectus. The annual returns
for the Class T Shares offered in this prospectus would be lower due to
higher distribution and service (12b-1) fees of the Class T Shares.

----------
(1) For the six months ended February 28, 2003 (Unaudited).
(2) Periods less than one year are not annualized.
(3) The ratios for periods less than one year are annualized.
(4) See Note 3 of the Semi Annual Report for current period amounts.
14
ADDITIONAL INFORMATION ABOUT THE SSgA FUNDS
CLASS T SHAREHOLDERS: For shareholder inquiries regarding your Class T Shares or
to request additional information on the Class T Shares offered in this
prospectus, including the fund's Statement of Additional Information, annual or
semi-annual report, please contact your Financial Intermediary.
Statements of Additional Information (SAI) include additional information about
the fund. The fund's SAI is incorporated into this prospectus by reference and
is available, without charge, upon request. Additional information about the
fund's investments is available in the fund's annual and semi-annual reports to
shareholders. In the fund's annual report you will find a discussion of the
market conditions and investment strategies that significantly affected the
fund's performance during its last fiscal year. To request an SAI, annual or
semi-annual report, or other information about a fund, please contact:
State Street Global Markets, LLC
State Street Financial Center
One Lincoln Street
Boston, Massachusetts 02111-2900
1-800-997-7327
The prospectuses, SAIs and annual and semi-annual reports are also available on
the SSgA Funds' website at www.ssgafunds.com.
You can review and copy information about the fund, including the SAI, at the
Securities and Exchange Commission's Public Reference Room in Washington, D.C.
You can receive information on the operation of the Public Reference Room by
calling 1-202-942-8090. Reports and other information about the SSgA Funds are
available on the EDGAR database on the Commission's internet site at
http://www.sec.gov, and copies also may be obtained, upon payment of a
duplicating fee, by electronic request at the following e-mail address:
publicinfo@sec.gov, or by writing the Commission's Public Reference Section,
Washington, D.C. 20549-0102.
SSgA Funds' Investment Company Act File No. 811-5430
15
Filed pursuant to Rule 485(b)
File Nos. 33-19229; 811-5430
SSgA FUNDS
State Street Financial Center
One Lincoln Street
Boston, Massachusetts 02111-2900
1-800-997-7327
www.ssgafunds.com
STATEMENT OF ADDITIONAL INFORMATION
PRIME MONEY MARKET FUND
CLASS T SHARES
August 25, 2003
This Statement of Additional Information is not a prospectus. Instead, it
supplements or describes in greater detail the SSgA Funds and the series named
above as contained in the prospectus dated August 25, 2003. You may obtain a
copy of the prospectus by calling 1-800-647-7327.
1
TABLE OF CONTENTS

2
FUND HISTORY
SSgA Funds (the Investment Company) was organized as a Massachusetts business
trust on October 3, 1987, and operates under a First Amended and Restated Master
Trust Agreement, dated October 13, 1993, as amended.
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS
The SSgA Funds is an open-end, management investment company which offers shares
of beneficial interest in separate portfolios, each of which is referred to as a
fund. Each SSgA Fund is diversified(1), in that at least 75% of its total assets
are represented by a variety of instruments including cash, government
securities, securities of other investment companies, and other securities
within the limitations described in the investment restrictions.
INVESTMENT STRATEGIES
To the extent consistent with its investment objective and restrictions, the
fund may invest in the following instruments and use the following investment
techniques:
MONEY MARKET INSTRUMENTS. A money market fund expects to maintain, but does not
guarantee, a net asset value of $1.00 per share for purposes of purchases and
redemptions by valuing its fund shares at "amortized cost." A money market fund
will maintain a dollar-weighted average maturity of 90 days or less. A fund will
invest in securities maturing within 397 days or less at the time of the trade
date or such other date upon which a fund's interest in a security is subject to
market action. A money market fund will follow procedures reasonably designed to
assure that the prices so determined approximate the current market value of the
fund's securities. The procedures also address such matters as diversification
and credit quality of the securities the fund purchases and were designed to
ensure compliance by the fund with the requirements of Rule 2a-7 of the
Investment Company Act of 1940 (1940 Act).
US GOVERNMENT OBLIGATIONS. The types of US Government obligations in which each
fund may at times invest include: (1) A variety of US Treasury obligations,
which differ only in their interest rates, maturities and times of issuance; and
(2) obligations issued or guaranteed by US Government agencies and
instrumentalities which are supported by any of the following: (a) the full
faith and credit of the US Treasury, (b) the right of the issuer to borrow an
amount limited to a specific line of credit from the US Treasury, (c)
discretionary authority of the US Government agency or instrumentality or (d)
the credit of the instrumentality (examples of agencies and instrumentalities
are: Federal Land Banks, Federal Housing Administration, Federal Farm Credit
Bank, Farmers Home Administration, Export--Import Bank of the United States,
Central Bank for Cooperatives, Federal Intermediate Credit Banks, Federal Home
Loan Banks, General Services Administration, Maritime Administration, Tennessee
Development Bank, Asian-American Development Bank, Student Loan Marketing
Association, International Bank for Reconstruction and Development and Federal
National Mortgage Association). No assurance can be given that in the future the
US Government will provide financial support to such US Government agencies or
instrumentalities described in (2)(b), (2)(c) and (2)(d), other than as set
forth above, since it is not obligated to do so by law. Each fund may purchase
US Government obligations on a forward commitment basis. The funds may also
purchase Treasury Inflation-Protection Securities, a type of inflation-indexed
Treasury security. Treasury Inflation Protected Securities provide for
semiannual payments of interest and a payment of principal at maturity which are
adjusted for changes in the Consumer Price Index for All Urban Consumers
("CPI-U").
VARIABLE AND FLOATING RATE SECURITIES. The funds may purchase variable rate
securities which are instruments issued or guaranteed by entities such as the:
(1) US Government, or an agency or instrumentality thereof, (2) corporations,
(3) financial institutions, (4) insurance companies or (5) trusts that have a
rate of interest subject to adjustment at regular intervals but less frequently
than annually. A variable rate security provides for the automatic establishment
of a new interest rate on set dates. Variable rate obligations whose interest is
readjusted no less frequently than annually will be deemed to have a maturity
equal to the period remaining until the next readjustment of the interest rate.
The funds may also purchase floating rate securities. A floating rate security
provides for the automatic adjustment of its interest rate whenever a specified
interest rate changes. Interest rates on these securities are ordinarily tied
to, and are a percentage of, a widely recognized interest rate, such as the
yield on 90-day US Treasury bills or the prime rate of a specified bank. These
rates may change as often as twice daily. Generally, changes in interest rates
will have a smaller effect on the market value of variable and floating rate
securities than on the market value of comparable fixed rate fixed income
obligations. Thus,
----------
(1) With the exception of the SSgA Tuckerman Active REIT Fund, which is
non-diversified.
3
investing in variable and floating rate securities generally allows less
opportunity for capital appreciation and depreciation than investing in
comparable fixed rate fixed income securities.
REPURCHASE AGREEMENTS. The fund may enter into repurchase agreements with
financial institutions. Under repurchase agreements, these parties sell
securities to a fund and agree to repurchase the securities at the fund's cost
plus interest within a specified time. The securities purchased by each fund
have a total value in excess of the purchase price paid by the fund and are held
by the Custodian or another board-approved custodian bank until repurchased.
Repurchase agreements assist the fund in being invested fully while retaining
"overnight" flexibility in pursuit of investments of a longer-term nature. The
fund will limit repurchase transactions to those member banks of the Federal
Reserve System and broker-dealers whose creditworthiness is continually
monitored and found satisfactory by the Advisor.
ASSET-BACKED SECURITIES. Asset-backed securities represent undivided fractional
interests in pools of instruments, such as consumer loans, and are similar in
structure to mortgage-related pass-through securities. Payments of principal and
interest are passed through to holders of the securities and are typically
supported by some form of credit enhancement, such as a letter of credit, surety
bond, limited guarantee by another entity or by priority to certain of the
borrower's other securities. The degree of credit-enhancement varies, generally
applying only until exhausted and covering only a fraction of the security's par
value.
The value of asset-backed securities is affected by changes in the market's
perception of the asset backing the security, changes in the creditworthiness of
the servicing agent for the instrument pool, the originator of the instruments
or the financial institution providing any credit enhancement and the
expenditure of any portion of any credit enhancement. The risks of investing in
asset-backed securities are ultimately dependent upon payment of the underlying
instruments by the obligors, and a fund would generally have no recourse against
the obligee of the instruments in the event of default by an obligor. The
underlying instruments are subject to prepayments which shorten the weighted
average life of asset-backed securities and may lower their return, in the same
manner as described below for prepayments of pools of mortgage loans underlying
mortgage-backed securities. Use of asset-backed securities will represent less
than 5% of the fund's total assets by issuer.
MORTGAGE-RELATED SECURITIES. Mortgage pass-through certificates are issued by
governmental, government-related and private organizations and are backed by
pools of mortgage loans. These mortgage loans are made by savings and loan
associations, mortgage bankers, commercial banks and other lenders to home
buyers throughout the United States. The securities are "pass-through"
securities because they provide investors with monthly payments of principal and
interest that, in effect, are a "pass-through" of the monthly payments made by
the individual borrowers on the underlying mortgage loans, net of any fees paid
to the issuer or guarantor of the pass-through certificates. The principal
governmental issuer of such securities is the Government National Mortgage
Association ("GNMA"), which is a wholly-owned US Government corporation within
the Department of Housing and Urban Development. Government-related issuers
include the Federal Home Loan Mortgage Corporation ("FHLMC"), a corporate
instrumentality of the United States created pursuant to an act of Congress
which is owned entirely by the Federal Home Loan Banks, and the Federal National
Mortgage Association ("FNMA"), a government sponsored corporation owned entirely
by private stockholders. Commercial banks, savings and loan associations,
private mortgage insurance companies, mortgage bankers and other secondary
market issuers also create pass-through pools of conventional residential
mortgage loans. Such issuers may be the originators of the underlying mortgage
loans as well as the guarantors of the mortgage-related securities.
1. GNMA Mortgage Pass-Through Certificates ("Ginnie Maes"). Ginnie Maes
represent an undivided interest in a pool of mortgage loans that are
insured by the Federal Housing Administration or the Farmers Home
Administration or guaranteed by the Veterans Administration. Ginnie
Maes entitle the holder to receive all payments (including
prepayments) of principal and interest owed by the individual
mortgagors, net of fees paid to GNMA and to the issuer which assembles
the loan pool and passes through the monthly mortgage payments to the
certificate holders (typically, a mortgage banking firm), regardless
of whether the individual mortgagor actually makes the payment.
Because payments are made to certificate holders regardless of whether
payments are actually received on the underlying loans, Ginnie Maes
are of the "modified pass-through" mortgage certificate type. GNMA is
authorized to guarantee the timely payment of principal and interest
on the Ginnie Maes as securities backed by an eligible pool of
mortgage loans. The GNMA guaranty is backed by the full faith and
credit of the United States, and GNMA has unlimited authority to
borrow funds from the US Treasury to make payments under the guaranty.
The market for Ginnie Maes is highly liquid because of the size of the
market and the active participation in the secondary market by
securities dealers and a variety of investors.
2. FHLMC Mortgage Participation Certificates ("Freddie Macs"). Freddie
Macs represent interests in groups of specified first lien residential
conventional mortgage loans underwritten and owned by FHLMC. Freddie
Macs entitle the holder to timely payment of interest, which is
guaranteed by FHLMC. FHLMC guarantees either ultimate collection or
timely payment of all principal payments on the underlying mortgage
loans. In cases where FHLMC has not guaranteed timely payment of
principal, FHLMC may remit the amount due on account of its guarantee
of ultimate payment of principal at any time after default on an
underlying loan, but in no event later than one year after it becomes
payable. Freddie Macs are not guaranteed
4
by the United States or by any of the Federal Home Loan Banks and do
not constitute a debt or obligation of the United States or of any
Federal Home Loan Bank. The secondary market for Freddie Macs is
highly liquid because of the size of the market and the active
participation in the secondary market by FHLMC, securities dealers and
a variety of investors.
3. FNMA Guaranteed Mortgage Pass-Through Certificates ("Fannie Maes").
Fannie Maes represent an undivided interest in a pool of conventional
mortgage loans secured by first mortgages or deeds of trust, on
one-family to four-family residential properties. FNMA is obligated to
distribute scheduled monthly installments of principal and interest on
the loans in the pool, whether or not received, plus full principal of
any foreclosed or otherwise liquidated loans. The obligation of FNMA
under its guaranty is solely the obligation of FNMA and is not backed
by, nor entitled to, the full faith and credit of the United States.
The market value of mortgage-related securities depends on, among other things,
the level of interest rates, the certificates' coupon rates and the payment
history of the underlying borrowers.
Although the mortgage loans in a pool underlying a mortgage pass-through
certificate will have maturities of up to 30 years, the average life of a
mortgage pass-through certificate will be substantially less because the loans
will be subject to normal principal amortization and also may be prepaid prior
to maturity. Prepayment rates vary widely and may be affected by changes in
mortgage interest rates. In periods of falling interest rates, the rate of
prepayment on higher interest mortgage rates tends to increase, thereby
shortening the actual average life of the mortgage pass-through certificate.
Conversely, when interest rates are rising, the rate of prepayment tends to
decrease, thereby lengthening the average life of the mortgage pass-through
certificate. Accordingly, it is not possible to predict accurately the average
life of a particular pool. Reinvestment of prepayments may occur at higher or
lower rates than the original yield on the certificates. Due to the prepayment
feature and the need to reinvest prepayments of principal at current rates,
mortgage pass-through certificates with underlying loans bearing interest rates
in excess of the market rate can be less effective than typical noncallable
bonds with similar maturities at "locking in" yields during periods of declining
interest rates, although they may have comparable risks of declining in value
during periods of rising interest rates.
ILLIQUID SECURITIES. The fund will not invest more than 10% of its net assets in
illiquid securities or securities that are not readily marketable. These
securities include repurchase agreements and time deposits of more than seven
days' duration and participation interests, floating and variable rate demand
obligations and tender option bonds as to which the fund cannot exercise a
demand feature in seven or fewer days or for which there is no secondary market.
The absence of a regular trading market for illiquid securities imposes
additional risk on investments in these securities. Illiquid securities may be
difficult to value and may often be disposed of only after considerable expense
and delay.
WHEN-ISSUED TRANSACTIONS. New issues of securities are often offered on a
when-issued basis. This means that delivery and payment for the securities
normally will take place several days after the date the buyer commits to
purchase them. The payment obligation and the interest rate that will be
received on securities purchased on a when-issued basis are each fixed at the
time the buyer enters into the commitment.
The fund will make commitments to purchase when-issued securities only with the
intention of actually acquiring the securities, but a fund may sell these
securities or dispose of the commitment before the settlement date if it is
deemed advisable as a matter of investment strategy. Cash or marketable high
quality debt securities equal to the amount of the above commitments will be
segregated on the fund's records. For the purpose of determining the adequacy of
these securities the segregated securities will be valued at market. If the
market value of such securities declines, additional cash or securities will be
segregated on the fund's records on a daily basis so that the market value of
the account will equal the amount of such commitments by the fund. The fund will
not invest more than 25% of its net assets in when-issued securities.
Securities purchased on a when-issued basis and held by the fund are subject to
changes in market value based upon the public's perception of changes in the
level of interest rates. Generally, the value of such securities will fluctuate
inversely to changes in interest rates -- i.e., they will appreciate in value
when interest rates decline and decrease in value when interest rates rise.
Therefore, if in order to achieve higher interest income a fund remains
substantially fully invested at the same time that it has purchased securities
on a "when-issued" basis, there will be a greater possibility of fluctuation in
the fund's net asset value.
When payment for when-issued securities is due, the fund will meet its
obligations from then-available cash flow, the sale of segregated securities,
the sale of other securities or, and although it would not normally expect to do
so, from the sale of the when-issued securities themselves (which may have a
market value greater or less than the fund's payment obligation). The sale of
securities to meet such obligations carries with it a greater potential for the
realization of capital gains, which are subject to federal income taxes.
FORWARD COMMITMENTS. The fund may contract to purchase securities for a fixed
price at a future date beyond customary settlement time consistent with the
fund's ability to manage its investment portfolio, maintain a stable net asset
value and meet redemption
5
requests. A fund may dispose of a commitment prior to settlement if it is
appropriate to do so and realize short-term profits or losses upon such sale.
When effecting such transactions, cash or liquid high quality debt obligations
held by the fund of a dollar amount sufficient to make payment for the portfolio
securities to be purchased will be segregated on the fund's records at the trade
date and maintained until the transaction is settled. Forward commitments
involve a risk of loss if the value of the security to be purchased declines
prior to the settlement date, or if the other party fails to complete the
transaction.
REVERSE REPURCHASE AGREEMENTS. The fund may enter into reverse repurchase
agreements under the circumstances described in "Investment Restrictions." Under
reverse repurchase agreements, a fund transfers possession of portfolio
securities to financial institutions in return for cash in an amount equal to a
percentage of the portfolio securities' market value and agrees to repurchase
the securities at a future date by repaying the cash with interest. The fund
retains the right to receive interest and principal payments from the securities
while they are in the possession of the financial institutions. Cash or liquid
high quality debt obligations from a fund's portfolio equal in value to the
repurchase price including any accrued interest will be segregated by the
Custodian on the fund's records while a reverse repurchase agreement is in
effect. Reverse repurchase agreements involve the risk that the market value of
securities sold by the fund may decline below the price at which it is obligated
to repurchase the securities. Reverse repurchase agreements may be used as a
means of borrowing temporarily for extraordinary or emergency purposes or to
facilitate redemptions and are not used to leverage the fund.
If the other party or "seller" defaults, a fund might suffer a loss to the
extent that the proceeds from the sale of the underlying securities and other
collateral held by the fund are less than the repurchase price and the fund's
cost associated with delay and enforcement of the repurchase agreement. In
addition, in the event of bankruptcy of the seller, a fund could suffer
additional losses if a court determines that the fund's interest in the
collateral is not enforceable.
VARIABLE AMOUNT MASTER DEMAND NOTES. Variable amount master demand notes are
unsecured obligations that are redeemable upon demand and are typically unrated.
These instruments are issued pursuant to written agreements between their
issuers and holders. The agreements permit the holders to increase (subject to
an agreed maximum) and the holders and issuers to decrease the principal amount
of the notes, and specify that the rate of interest payable on the principal
fluctuates according to an agreed formula. Generally, changes in interest rates
will have a smaller effect on the market value of these securities than on the
market value of comparable fixed income obligations. Thus, investing in these
securities generally allows less opportunity for capital appreciation and
depreciation than investing in comparable fixed income securities. There may be
no active secondary market with respect to a particular variable rate
instrument.
STRIPPED (ZERO COUPON) SECURITIES. The fund may invest in stripped securities,
which are zero coupon bonds, notes and debentures that: (1) do not pay current
interest and are issued at a substantial discount from par value; (2) have been
stripped of their unmatured interest coupons and receipts; or (3) pay no
interest until a stated date one or more years into the future. Stripped
securities may exhibit greater price volatility than ordinary debt securities
because of the manner in which their principal securities issued by the US
Treasury are recorded in the Federal Reserve book-entry record-keeping system.
Because stripped securities do not pay current income, their prices can be very
volatile when interest rates change. The fund may invest no more than 25% of its
assets in stripped securities that have been stripped by their holder, typically
a custodian bank or investment brokerage firm. A number of securities firms and
banks have stripped the interest coupons and resold them in custodian receipt
programs with different names such as Treasury Income Growth Receipts ("TIGRS")
and Certificates of Accrual on Treasuries ("CATS"). Privately-issued stripped
securities such as TIGRS and CATS are not themselves guaranteed by the US
Government, but the future payment of principal or interest on US Treasury
obligations which they represent is so guaranteed.
PURCHASE OF OTHER INVESTMENT COMPANY FUNDS. The fund may seek to achieve its
investment objective by investing in the shares of other investment companies,
or exchange traded funds registered as investment companies, that have
substantially similar investment objectives and policies. Federal law restricts
the ability of one registered investment company to invest in another. As a
result, the extent to which the fund may invest in another investment company
may be limited. With respect to investments in other mutual funds, the SEC has
granted the fund an exemption from the limitations of the 1940 Act that restrict
the amount of securities of underlying mutual funds the fund may hold, provided
that certain conditions are met. The conditions requested by the SEC were
designed to address certain abuses perceived to be associated with funds of
funds, including unnecessary costs (such as sales loads, advisory fees that may
be borne by the fund and administrative costs), and undue influence by a fund of
funds over the underlying fund. The conditions apply only when the fund and its
affiliates in the aggregate own more than 3% of the outstanding shares of any
one underlying fund.
INTERFUND LENDING. The SSgA Funds has been granted permission from the SEC to
participate in a joint lending and borrowing facility (the "Credit Facility").
Portfolios of the SSgA Funds may borrow money from the SSgA Money Market Fund
for temporary purposes. All such borrowing and lending will be subject to a
participating fund's fundamental investment limitations. The SSgA Money Market
Fund will lend through the program only when the returns are higher than those
available from an investment in repurchase agreements or short term reserves.
The SSgA Funds will borrow through the program only when the costs are equal to
or lower than the cost of bank loans. Interfund loans and borrowings normally
extend overnight, but can have a maximum duration of seven days. Loans may be
called on one business day's notice. A participating fund may have to borrow
from a bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to the SSgA Money Market Fund could result in a
lost investment opportunity or additional borrowing costs.
6
SECURITIES LENDING. A fund may lend portfolio securities with a value of up to
33-1/3% of its total assets. For these purposes, total assets shall include the
value of all assets received as collateral for the loan. Such loans may be
terminated at any time, and a fund will receive cash or other obligations as
collateral. In a loan transaction, as compensation for lending its securities, a
fund will receive a portion of the dividends or interest accrued on the
securities held as collateral or, in the case of cash collateral, a portion of
the income from the investment of such cash. In addition, a fund will receive
the amount of all dividends, interest and other distributions on the loaned
securities. However, the borrower has the right to vote the loaned securities. A
fund will call loans to vote proxies if a material issue affecting the
investment is to be voted upon. Should the borrower of the securities fail
financially, a fund may experience delays in recovering the securities or
exercising its rights in the collateral. Loans are made only to borrowers that
are deemed by Advisor to be of good financial standing. In a loan transaction, a
fund will also bear the risk of any decline in value of securities acquired with
cash collateral. A fund will minimize this risk by limiting the investment of
cash collateral to high quality instruments of short maturity. This strategy is
not used to leverage any fund.
MONEY MARKET INSURANCE. The fund participates in a financial guaranty insurance
policy agreement with a monoline stock insurance company solely with other money
market funds advised by the Advisor. The policy provides insurance coverage for
specified types of losses on certain money market instruments held by a
participating fund, including losses from nonpayment of principal or interest or
a bankruptcy or insolvency of the issuer or credit support provider, if any. The
insurance does not cover losses resulting from changes in interest rates or
other market developments. A participating fund is charged an annual premium for
the insurance coverage and may be subject to a special assessment if covered
losses exceed certain levels. A participating fund is subject to limits on the
amount it may recover and may incur losses regardless of the insurance.
INVESTMENT RESTRICTIONS
The fund is subject to the following fundamental investment restrictions, each
of which applies at the time an investment is made and may not be changed
without a vote of a majority of the funds shareholders. The fund will not:
1. Invest 25% or more of the value of its total assets in securities of
companies primarily engaged in any one industry (other than the US
Government, its agencies and instrumentalities). Concentration may
occur as a result of changes in the market value of portfolio
securities, but may not result from investment. Foreign and domestic
branches of US banks and US branches of foreign banks are not
considered a single industry for purposes of this restriction.
2. Borrow money, except as a temporary measure for extraordinary or
emergency purposes or to facilitate redemptions (not for leveraging or
investment), provided that borrowings do not exceed an amount equal to
33-1/3% of the current value of the fund's assets taken at market
value, less liabilities other than borrowings. If at any time the
fund's borrowings exceed this limitation due to a decline in net
assets, such borrowings will within three days be reduced to the
extent necessary to comply with this limitation. The fund will not
purchase investments once borrowed funds (including reverse repurchase
agreements) exceed 5% of its total assets.
3. Pledge, mortgage or hypothecate its assets. However, the fund may
pledge securities having a market value (on a daily marked-to-market
basis) at the time of the pledge not exceeding 33-1/3% of the value of
the fund's total assets to secure borrowings permitted by paragraph
(2) above.
4. With respect to 75% of its total assets, invest in securities of any
one issuer (other than securities issued by the US Government, its
agencies, and instrumentalities), if immediately after and as a result
of such investment the current market value of the fund's holdings in
the securities of such issuer exceeds 5% of the value of the fund's
assets and to not more than 10% of the outstanding voting securities
of such issuer.
5. Make loans to any person or firm; provided, however, that the making
of a loan shall not include (i) the acquisition for investment of
bonds, debentures, notes or other evidences of indebtedness of any
corporation or government which are publicly distributed or of a type
customarily purchased by institutional investors, or (ii) the entry
into "repurchase agreements." A fund may lend its portfolio securities
to broker-dealers or other institutional investors if the aggregate
value of all securities loaned does not exceed 33-1/3% of the value of
the fund's total assets.
6. Invest more than 10% of its net assets in the aggregate, on an ongoing
basis, in illiquid securities or securities that are not readily
marketable, including repurchase agreements and time deposits of more
than seven days' duration.
7. Purchase or sell puts, calls or invest in straddles, spreads or any
combination thereof.
8. Make short sales of securities or purchase any securities on margin,
except for such short-term credits as are necessary for the clearance
of transactions.
7
9. Purchase or sell real estate or real estate mortgage loans; provided,
however, that the fund may invest in securities secured by real estate
or interests therein or issued by companies which invest in real
estate or interests therein.
10. Purchase interests in oil, gas or other mineral exploration or
development programs.
11. Purchase or sell commodities or commodity futures contracts.
12. Engage in the business of underwriting securities issued by others,
except that the fund will not be deemed to be an underwriter or to be
underwriting on account of the purchase of securities subject to legal
or contractual restrictions on disposition.
13. Issue senior securities, except as permitted by its investment
objective, policies and restrictions, and except as permitted by the
1940 Act.
14. Make investments for the purpose of gaining control of an issuer's
management.
15. Purchase the securities of any issuer if the Investment Company's
officers, Directors, Advisor or any of their affiliates beneficially
own more than one-half of 1% of the securities of such issuer or
together own beneficially more than 5% of the securities of such
issuer.
16. Invest in securities of any issuer which, together with its
predecessor, has been in operation for less than three years if, as a
result, more than 5% of the funds' total assets would be invested in
such securities, except that the funds may invest in securities of a
particular issuer to the extent their respective underlying indices
invest in that issuer.
17. Purchase from or sell portfolio securities to its officers or
directors or other "interested persons" (as defined in the 1940 Act)
of the fund, including their investment advisors and affiliates,
except as permitted by the 1940 Act and exemptive rules or orders
thereunder.
With respect to the industry concentration outlined in Investment Restriction
No. 1, the Advisor treats US domestic banks and foreign branches of US banks as
a separate industry from foreign banks. To the extent these restrictions reflect
matters of operating policy which may be changed without shareholder vote, these
restrictions may be amended upon approval by the Board of Trustees and notice to
shareholders. If a percentage restriction is adhered to at the time of
investment, a subsequent increase or decrease in a percentage resulting from a
change in the values of assets will not constitute a violation of that
restriction, except as otherwise noted.
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES AND OFFICERS
The Board of Trustees is responsible for overseeing generally the management,
activities and affairs of each fund and has approved contracts with various
financial organizations to provide, among other services, day-to-day management
required by the SSgA Funds (see the section called "Investment Advisory and
Other Services."). The Trustees hold office for the life of the Trust. A Trustee
may resign or retire, and may be removed at any time by a vote of two-thirds of
Investment Company shares or by a vote of a majority of the Trustees. The
Trustees shall promptly call and give notice of a meeting of shareholders for
the purpose of voting upon removal of any Trustee when requested to do so in
writing by holders of not less than 10% of the shares then outstanding. A
vacancy on the Board of Trustees may be filled by the vote of a majority of the
remaining Trustees, provided that immediately thereafter at least two-thirds of
the Trustees have been elected by shareholders. The Board of Trustees as a group
beneficially own less than 1% of the outstanding voting securities the Trust.
The officers, all of whom are employed by the Administrator or its affiliates,
are responsible for the day-to-day management and administration of the SSgA
Funds' operations.
COMMITTEES OF THE BOARD OF TRUSTEES. There are three standing committees of the
Board of Trustees:
- Audit Committee, which consists of Messrs. Marshall, Mastrovich, Riley,
Shirk, Taber, and Todd, met two times during the last fiscal year. The
purpose of the Audit Committee is to recommend the selection, retention or
termination of auditors and, in connection therewith, to evaluate the
independence of the auditors, including whether the auditors provide any
consulting services to the manager, and to receive the auditors' specific
representations as to their independence; meet with the Funds' independent
auditors, including private meetings, as necessary (i) to review the
arrangements for and scope of the annual audit and any special audits; (ii)
to discuss any matters of concern relating to the Funds' financial
statements, including any adjustments to such statements recommended by the
auditors, or other results of said audit(s); (iii) to consider the
auditors' comments with respect to the Funds' financial policies,
procedures and internal accounting controls and management's responses
thereto; and (iv) to review the form of opinion the auditors propose to
render to the Board and shareholders; consider the effect upon the Funds of
any
8
changes in accounting principles or practices proposed by management or the
auditors; review the fees charged by the auditors for audit and non-audit
services; investigate improprieties or suspected improprieties in fund
operations; report its activities to the full Board on a regular basis and
to make such recommendations with respect to the above and other matters as
the Committee may deem necessary or appropriate; and perform such other
functions consistent with this Charter, the Trust's By-laws and governing
law, as the Audit Committee or the Board of Trustees deems necessary or
appropriate.
- The Governance Committee, which consists of Messrs. Anderson, Harbert,
Marshall, Mastrovich, Riley, Shirk, Taber and Todd, met two times during
the last fiscal year. The purpose of the Governance Committee is the review
of information and determination with respect to matters of Trustee
compensation, Trustee performance evaluation and independence of outside
counsel to the Trustees. The Governance Committee will not consider
nominees recommended by securities holders.
- The Valuation Committee, which consists of Messrs. Anderson, Harbert,
Marshall, Mastrovich, Riley, Shirk, Taber and Todd, meets as necessary as
determined by the SSgA Funds' Valuation Procedures. The Investment Company
did not convene any special meetings of the Valuation Committee during the
last fiscal year. The Investment Company has established procedures and
guidelines for valuing portfolio securities and makes fair value
determinations from time to time through the Valuation Committee, with the
assistance of the Oversight Committee, State Street Bank and Trust Company
(State Street) and SSgA Funds Management, Inc. The Valuation Committee
reviews the actions and recommendations of the Oversight Committee at each
quarterly Board of Trustees meeting and the Investment Company convenes
special meetings of the Valuation Committee as set forth in the Investment
Company's Securities Valuation Procedures.
The following lists the SSgA Funds' trustees and principal officers, mailing
addresses and ages, positions with the SSgA Funds and length of time served, and
present and principal occupations and other directorships held during the past
five years.
INTERESTED TRUSTEES

COMPENSATION
12
Trustees who are not officers or employees of Frank Russell Investment
Management Company, SSgA Funds Management, Inc. or their affiliates are paid
$92,500 each fiscal year and are reimbursed for travel and other expenses they
incur in attending Board meetings. As of the date of this SAI, the Trustees were
not paid pension or retirement benefits as part of Investment Company expenses.
However, the Trustees have approved a deferred compensation plan by which they
would be allowed to invest a portion of their annual trustee fee in shares of
the SSgA Funds. The Investment Company has obtained an exemptive order from the
SEC to enable it to offer this benefit. Participation by the Trustees is
optional. The Investment Company's officers are compensated by either the
Administrator or its affiliates or the Advisor and its affiliates.
The aggregate compensation information shown below is for the original SSgA
Prime Money Market Fund class (referred to as the "Institutional Class") for the
fiscal year ending August 31, 2002:

CONTROLLING AND PRINCIPAL SHAREHOLDERS
State Street Bank and Trust Company ("State Street") may from time to time
have discretionary authority over accounts which invest in Investment Company
shares. These accounts include accounts maintained for securities lending
clients and accounts which permit the use of Investment Company portfolios as
short-term cash sweep investments. Shares purchased for all discretionary
accounts are held of record by State Street, who retains voting control of
such shares. As of July 31, 2003, State Street held of record less than 25%
of the issued and outstanding shares of any class of shares of the fund in
connection with its discretionary accounts. Consequently, State Street is not
deemed to be a controlling person of Investment Company for purposes of the
1940 Act.
The Trustees and officers of Investment Company, as a group, own less than 1% of
any class of shares of the fund's voting securities.
Frank Russell Investment Management Company ("Administrator"), Investment
Company's administrator, will be the sole shareholder of the Class T Shares of
the fund until such time as the fund has public shareholders and therefore may
be deemed a controlling person.
As of July 31, 2003, the following shareholders owned of record 5% or more
of the issued and outstanding shares of the Institutional Class of the fund.
Such shares may be held pursuant to a shareholder servicing arrangement in
omnibus accounts for underlying shareholders:
- GFAS Control Account MT01-State Street Bank, PO Box 1992, Quincy, MA
02171--84.62%
14
INVESTMENT ADVISORY AND OTHER SERVICES
ADVISOR
SSgA Funds Management, Inc. (the Advisor) serves as the SSgA Funds' investment
advisor pursuant to an Advisory Agreement dated May 1, 2001 (the Advisory
Agreement). The Advisor is a wholly owned subsidiary of State Street
Corporation, a publicly held bank holding company. The Advisor, State Street,
and other advisory affiliates of State Street make up State Street Global
Advisors (SSgA), the investment management arm of State Street Corporation.
State Street, the SSgA Funds' Custodian and Transfer and Dividend Paying Agent,
and State Street Global Markets, LLC, the Funds' Distributor, are affiliated
persons of the Advisor. The address of the Advisor is State Street Financial
Center, One Lincoln Street, Boston, MA 02111-2900. State Street Corporation's
address is 225 Franklin Street, Boston, MA 02110.
The Advisory Agreement will continue from year to year provided that a majority
of the Trustees who are not interested persons of the fund and either a majority
of all Trustees or a majority of the shareholders of the fund approve its
continuance. The Advisory Agreement may be terminated by the Advisor or a fund
without penalty upon sixty days' notice and will terminate automatically upon
its assignment.
Under the Advisory Agreement, the Advisor directs each Fund's investments in
accordance with its investment objective, policies and limitations. For these
services, the fund pays an annual management fee to the Advisor. The management
fee rate is a percentage of the average daily net asset value of the fund,
calculated daily and paid monthly.
The management fee of the Class T Shares is the same as the management fee of
the Institutional Class. Therefore, the management fee is allocated equally
among classes and shareholders.
The Institutional Class accrued the following expenses to Advisor for the fiscal
years ended August 31 (and for period prior to May 1, 2001, to the Institutional
Class's previous advisor):

The Advisor contractually agreed to waive .5% of its .15% advisory fee. The
Advisor has contractually agreed to this waiver through December 31, 2010. The
Advisor waived $3,025,320 in fiscal 2002, $2,108,253 in fiscal 2001 and
$1,137,643 in fiscal 2000. In addition, the Advisor has contractually agreed to
reimburse the fund for all expenses in excess of .20% of average daily net
assets on an annual basis until December 31, 2003. The Advisor reimbursed
$1,189,504 in fiscal 2002, $0 in fiscal 2001 and $535,216 in fiscal 2000.
APPROVAL OF THE ADVISORY AGREEMENT. At a meeting held on April 8, 2003, the
Board of Trustees, including a majority of the members of the board who are not
"interested persons" of the Investment Company (the "Independent Trustees"),
approved the continuation of the Advisory Agreement between the Advisor and the
SSgA Funds. In considering the continuation of the Advisory Agreement, the Board
of Trustees reviewed a variety of materials relating to the SSgA Funds and the
Advisor, including the advisory fees charged and any related expense
limitations, total expenses and expense ratios and performance of each fund
relative to other similar mutual funds for one, three and five year periods. The
Trustees also considered the profitability of the Advisor with respect to the
services it renders to the funds under the Advisory Agreement and the
profitability of the Advisor's affiliated companies with respect to the services
provided to the Funds by such affiliated companies. The Trustees reviewed
materials describing the Advisor's personnel and operations, including its
investment management and its compliance capabilities and undertakings. The
Trustees considered, among other things, the services provided under the
Advisory Agreement and other services that the Advisor and its affiliates
provide to the Investment Company; the complexity of those services, both on an
absolute basis and relative to other mutual fund complexes; the manner in which
the Advisor discharges these services; the financial strength of the Advisor;
the organization and compensation structure of the Advisor, including staff
experience and qualifications; and the process by which investment decisions are
made. Much of the material was assembled and provided by Lipper Inc., an
independent service provider engaged to provide the Board of Trustees with
objective materials for this extremely important annual review. The Independent
Trustees met among themselves and separately with representatives of the Advisor
to evaluate this information. At these meetings, the Independent Trustees were
separately represented by independent counsel.
15
After considering the foregoing materials and factors, as well as others, the
Board of Trustees concluded that approval of the Advisory Agreement would be in
the interests of the funds and their shareholders because: (a) over a period of
years the performance of each fund compares favorably, or very favorably, to
that of similar mutual funds; and (b) the Advisor's fees and expense ratios for
each fund compare very favorably to those of similar mutual funds and are
exceptionally reasonable in relation to the services provided to the Investment
Company. The Trustees concluded that the profitability of the Advisor and its
affiliates with respect to services provided by them to the funds was not
excessive.
The Trustees are very satisfied with the Advisor's ongoing compliance efforts
and undertakings, its responsiveness to any concerns expressed by Trustees
regarding the management of the funds and with the Advisor's overall
consistently excellent and cost-efficient performance. The Trustees believe that
their efforts throughout the year help assure that the best interests of the
funds and their shareholders are always considered in connection with the
day-to-day operations of a large diverse family of funds.
ADMINISTRATOR
Frank Russell Investment Management Company (the Administrator) serves as the
Investment Company's administrator, pursuant to an Administration Agreement
dated April 12, 1988 (the Administration Agreement).
The Administrator is a wholly owned subsidiary of Frank Russell Company. Frank
Russell Company was founded in 1936 and has provided comprehensive asset
management consulting services since 1969 for institutional pools of investment
assets, principally those of large corporate employee benefit plans. Frank
Russell Company and its affiliates have offices in Tacoma, Winston-Salem, New
York City, Toronto, London, Paris, Tokyo, Sydney, Singapore, Auckland and
Geneva, and have approximately 1,400 officers and employees. The Administrator's
and Frank Russell Company's mailing address is 909 A Street, Tacoma, WA 98402.
Frank Russell Company is an independently operated subsidiary of The
Northwestern Mutual Life Insurance Company.
Pursuant to the Administration Agreement with Investment Company, the
Administrator will: (1) supervise all aspects of the fund's operations; (2)
provide the fund with administrative and clerical services, including the
maintenance of certain of the fund's books and records; (3) arrange the periodic
updating of the fund's prospectuses and any supplements thereto; (4) provide
proxy materials and reports to fund shareholders and the Securities and Exchange
Commission; (5) provide the fund with adequate office space and all necessary
office equipment and services, including telephone service, heat, utilities,
stationery supplies and similar items; and (6) prepare monthly fact sheets for
each portfolio of the Investment Company. For all services provided by the
Administrator pursuant to the Administration Agreement, the SSgA Funds pay the
Administrator an annual fee equal to the sum of the products of the average
daily net assets for each fund multiplied by the following percentages:
MONEY MARKET PORTFOLIOS
3.15 basis points up to and including $15 billion; 2.9 basis points thereafter
US EQUITY PORTFOLIOS
3.15 basis points up to and including $2 billion; 2.9 basis points thereafter
US FIXED INCOME PORTFOLIOS
3.15 basis points up to and including $1 billion; 2.9 basis points thereafter
INTERNATIONAL PORTFOLIOS
7.0 basis points up to and including $1 billion; 5.0 basis points thereafter
FEEDER PORTFOLIOS(1)
3.15 basis points up to and including $1 billion; 1.0 basis points thereafter
For purposes of determining the breakpoints in calculating the fees above, the
assets will be aggregated.
In addition, the Administrator charges a flat fee of $30,000 per year if the
fund has less than $500 million in assets under management.
The percentage of the fee paid by a particular fund is equal to the percentage
of average aggregate daily net assets that are attributable to that fund. The
Administrator will also receive reimbursement of expenses it incurs in
connection with establishing new investment
----------
(1) The fee applicable to Feeder Portfolios shall apply for so long as all
investable assets of the applicable fund are invested in another investment
company with substantially the same investment objectives and policies. The
fee would revert to the appropriate fee, classified by fund type, should
the fund cease operating as a Feeder Portfolio.
16
portfolios. The Administration Agreement will continue from year to year
provided that a majority of the Trustees and a majority of the Trustees who are
not interested persons of each fund and who have no direct or indirect financial
interest in the operation of the Distribution Plan described below or the
Administration Agreement approve its continuance. The Agreement may be
terminated by the Administrator or any fund without penalty upon sixty days'
notice and will terminate automatically upon its assignment.
The Institutional Class accrued the following expenses to Administrator for the
fiscal years ended August 31:

CUSTODIAN AND TRANSFER AGENT
State Street serves as the Custodian and Transfer and Dividend Paying Agent for
the Investment Company. State Street also provides the basic portfolio
recordkeeping required by the Investment Company for regulatory and financial
reporting purposes. For its services as Custodian, State Street is paid an
annual fee in accordance with the following with respect to the all funds other
than international funds, feeder funds and the LifeSolutions Funds:
- Portfolio Administration. A fee payable monthly on a pro rata basis, based
on the following percentages of average daily net assets of each fund: $0
up to $1.5 billion--0.02%, $1.5 billion to $20 billion--0.015%; $20 billion
to $30 billion--.01%; over $30 billion--.0075% (for purposes of calculating
the break point, the assets of individual portfolios are aggregated);
- Multiple Class Fee--$18,000 per class;
- Portfolio Trading (per transaction). Fed book entry trade--$10; Depository
Trust Company trade--$6; physical trade--$25; each NY Fed maturity--$8; all
option trading, futures trading, and other trades--$25; incoming Fed
wires--$4.70; outgoing Fed wires--$4.55;
- Pricing. Monthly pricing fees of $375 per investment portfolio and from $4
to $16 per security, depending on the type of instrument and the pricing
service used;
- Yield Calculation. $350 per month;
- Earnings Credit. A balance credit is applied against the custody fees
(excluding out-of-pocket expenses). The credit is based on 90% of the
average 90-day Treasury bill rate for the month, times the average
collected balance in the custodian demand deposit account for the month
billed;
- On-line Service Charges, Accounting--$80 per month per fund; and
- Out of Pocket Expenses at Cost. Include but are not limited to: postage,
transfer fees, stamp duties, government taxes, wire fees, telexes, freight,
telephones, etc.
For Transfer and Dividend Paying Agent services, State Street is paid the
following annual account services fees: $13.35 open account fee; $2.57 closed
account fee; $1.85 investor fee; $3.09 CDSC fee; and $20,000 fund minimum. State
Street is also paid the following activity based fees: $3 telephone call fee; $5
teleservicing fee; $5 telephone transaction fee for purchases or redemptions; $5
fulfillment fee; $10 IRA custodial fee for annual maintenance per IRA account;
and charges related to compliance and regulatory services of 15 cents per
non-networked level 3 account, 5 cents for each foreign account annually and a
minimum monthly fee of $200 for each management company. Portfolio fees are
allocated to each fund based on the average net asset value of each fund and are
billable on a monthly basis at the rate of 1/12 of the annual fee. State Street
is reimbursed by each fund for supplying certain out-of-pocket expenses
including confirmation statements, investor statements, banking fees, postage,
forms, audio response, telephone, records retention, customized
programming/enhancements, reports, transcripts, microfilm, microfiche, and
expenses incurred at the specific direction of the fund.
DISTRIBUTOR
State Street Global Markets, LLC (the Distributor) serves as the distributor of
fund shares pursuant to a Distribution Agreement dated March 1, 2002, as amended
("Distribution Agreement"). The Distributor is a wholly owned subsidiary of
State Street Corporation. The Advisor, Custodian and Transfer Agent are also
wholly owned subsidiaries of State Street Corporation. The Distributor's mailing
address is State Street Financial Center, OneLincoln Street, Boston, MA
02111-2900.
17
CODE OF ETHICS
The Advisor, Distributor, Custodian, Transfer Agent, Administrator and
Investment Company have each adopted a code of ethics (the Investment Company
code being referred to herein as the Code of Ethics) under Rule 17j-1 of the
1940 Act. The Code of Ethics, by relying on the codes of the underlying service
providers, permits personnel of the above-named service providers or officers of
the Investment Company, subject to the provisions of the relevant code of
ethics, to invest in securities, including securities that may be purchased or
held by the Advisor or the Investment Company. Under the relevant code of
ethics, all employees or officers who are deemed to be access persons (persons
who have interaction with funds or accounts managed by the Advisor as part of
their job function) must pre-clear personal securities transactions. Each code
of ethics is designed to ensure that employees conduct their personal securities
transactions in a manner that does not create an actual or potential conflict of
interest to the business or fiduciary responsibilities of the Investment
Company's service providers or officers. In addition, the Code of Ethics
establishes standards prohibiting the trading in or recommending of securities
based on material, nonpublic information or the divulgence of such information
to others.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICING ARRANGEMENTS
DISTRIBUTION PLAN. Under the 1940 Act, the Securities and Exchange Commission
has adopted Rule 12b-1, which regulates the circumstances under which a fund
may, directly or indirectly, bear distribution and shareholder servicing
expenses. Rule 12b-1 provides that a fund may pay for such expenses only
pursuant to a plan adopted in accordance with the Rule. Accordingly, the fund
has adopted an active distribution service plan providing payment to the
Distributor for various distribution, shareholder and administrative services up
to the plan limit
In connection with the Trustees' consideration of whether to adopt the
distribution plan, the Distributor, as the fund's principal underwriter,
represented to the Trustees that the Distributor believes that the Distribution
Plan should result in increased sales and asset retention for the fund by
enabling the fund to reach and retain more investors and servicing agents (such
as brokers, banks, financial planners, investment advisors and other financial
institutions), although it is impossible to know for certain in the absence of a
Distribution Plan or under an alternative distribution arrangement, the level of
sales and asset retention that a fund would have. Accordingly, the Board of
Trustees adopted a distribution plan on January 8, 1992, which was restated to
reflect the change of distributor and to update current operations on April 9,
2002, for the original SSgA Funds' class (referred to herein as the
Institutional Class). The Board of Trustees adopted a distribution plan for
Class T Shares of the fund on July 14, 2003 (the Plan) which is similar in all
material respects to the distribution plan for the Institutional Class, other
than with respect to the limitation on distribution and shareholder servicing
fees.
Under the Plan each fund pays the Distributor a fee not to exceed 0.55% of the
fund's average net asset value per year, for distribution, shareholder and
administrative services provided to the fund by the Distributor and Financial
Intermediaries. The Distributor pays Financial Intermediaries for shareholder
and administrative services provided to a fund out of the fee the Distributor
receives from the fund. Fees paid to the Financial Intermediaries providing
shareholder and administrative services to a fund are not permitted by the Plan
to exceed .50% of the fund's average net asset value per year. Payments to the
Distributor for distribution and shareholder services to a fund are not
permitted by the Plan to exceed 0.05% of the fund's average daily net asset
value per year. Any payments that are required to be made to the Distributor or
Financial Intermediaries that cannot be made because of the limitations
contained in the Plan may be carried forward and paid in the following two
fiscal years so long as the Plan is in effect.
The Plan does not provide for the fund to be charged for interest, carrying or
any other financing charges on any distribution expenses carried forward to
subsequent years. A quarterly report of the amounts expended under the Plan, and
the purposes for which such expenditures were incurred, must be made to the
Trustees for their review. The Plan may not be amended without shareholder
approval to increase materially the distribution or shareholder servicing costs
that the fund may pay. The Plan and material amendments to it must be approved
annually by all of the Trustees and by the Trustees who are neither "interested
persons" (as defined in the 1940 Act) of the fund nor have any direct or
indirect financial interest in the operation of the Plan or any related
agreements.
DISTRIBUTION AND SHAREHOLDER SERVICING. Payments under the Plan are made to the
Distributor to finance activity which is intended to result in the sale and
retention of fund shares including: (1) payments made to certain broker-dealers,
investment advisors and other third-party intermediaries; (2) the costs of
prospectuses, reports to shareholders and sales literature; (3) advertising; and
(4) expenses incurred in connection with the promotion and sale of fund shares,
including Distributor's overhead expenses for rent, office supplies, equipment,
travel, communication, compensation and benefits of sales personnel.
Long-term shareholders of the fund may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.
18
Under the Plan, the fund and/or the Distributor may also enter into Service
Agreements with financial institutions, which may include the Advisor, to
provide shareholder servicing with respect to shares of the fund held by or for
the customers of the Financial Intermediaries. Under the Service Agreements, the
Financial Intermediaries may provide various services for such customers,
including: answering inquiries regarding the fund; assisting customers in
changing dividend options, account designations and addresses; performing
subaccounting for such customers; establishing and maintaining customer accounts
and records; processing purchase and redemption transactions; providing periodic
statements showing customers' account balances and integrating such statements
with those of other transactions and balances in the customers' other accounts
serviced by the Financial Intermediaries; arranging for bank wires transferring
customers' funds; and such other services as the customers may request in
connection with the fund, to the extent permitted by applicable statute, rule or
regulation. Financial Intermediaries may receive from the fund and/or the
Distributor, for shareholder servicing, monthly fees at a rate that shall not
exceed 0.50% per annum of the average daily net asset value of the fund's shares
owned by or for shareholders with whom the Service Organization has a servicing
relationship. Banks and other financial service firms may be subject to various
state laws, and may be required to register as dealers pursuant to state law.
The Institutional Class accrued the following expenses to Russell Fund
Distributors, Inc. (the distributor prior to March 1, 2002) for the fiscal years
ended August 31:

Since March 1, 2002, the Institutional Class fund accrued the following expenses
to the Distributor (State Street Global Markets, LLC) for the fiscal year ended
August 31:
2002
---------
$ 619,409
For fiscal 2002, these amounts are reflective of the following individual
payments:

The Institutional Class accrued expenses in the following amount to State
Street, under a Service Agreement pursuant to Rule 12b-1, for the fiscal years
ended August 31:
----------
(1) Other expenses may include such items as compensation for travel,
conferences and seminars for staff, subscriptions, office charges and
professional fees.
19

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Investment Company's independent
accountants. PricewaterhouseCoopers LLP is responsible for performing annual
audits of the financial statements and financial highlights in accordance with
auditing standards generally accepted in the United States of America, a review
of federal tax returns, and, pursuant to Rule 17f-2 of the 1940 Act, three
security counts. The mailing address of PricewaterhouseCoopers LLP is 160
Federal Street, Boston, MA 02110.
LEGAL COUNSEL
Goodwin Procter LLP, Exchange Place, Boston, MA 02109, provides legal services
to the SSgA Funds.
BROKERAGE PRACTICES AND COMMISSIONS
All portfolio transactions are placed on behalf of the fund by the Advisor. The
Advisor ordinarily pays commissions when it executes transactions on a
securities exchange. In contrast, there is generally no stated commission on the
purchase or sale of securities traded in the over-the-counter markets, including
most debt securities and money market instruments. Rather, the price of such
securities includes an undisclosed "commission" in the form of a mark-up or
mark-down. The cost of securities purchased from underwriters includes an
underwriting commission or concession.
Subject to the arrangements and provisions described below, the selection of a
broker or dealer to execute portfolio transactions is usually made by the
Advisor. The Advisory Agreement provides, in substance and subject to specific
directions from officers of Investment Company, that in executing portfolio
transactions and selecting brokers or dealers, the principal objective is to
seek the best overall terms available to the fund. Ordinarily, securities will
be purchased from primary markets, and the Advisor will consider all factors it
deems relevant in assessing the best overall terms available for any
transaction, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, for the specific
transaction and other transactions on a continuing basis.
The Advisory Agreement authorizes the Advisor to select brokers or dealers
(including affiliates) to arrange for the purchase and sale of fund securities,
including principal transactions. In evaluating the best overall terms
available, the Advisor is also authorized to consider the "brokerage and
research services" (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the fund and/or the Advisor (or its
affiliates). The Advisor selects brokers, including affiliates, for the purchase
and sale of fund securities which in the Advisor's best judgment provide prompt
and reliable execution of orders at favorable prices and reasonable commission
rates. Subject to that primary consideration, dealers may be selected for
research, statistical or other services to enable the fund to supplement its own
research and analysis. Research services generally include services which assist
investment professionals in their investment decision-making process, including
information concerning securities or indexes, performance, technical market
action, pricing, risk measurement, corporate responsibility and proxy issues, in
addition to political and economic developments.
The Advisor is authorized to cause the fund to pay a commission to a broker or
dealer who provides such brokerage and research services for executing a
portfolio transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction. The fund or
the Advisor, as appropriate, must determine in good faith that such commission
was reasonable in relation to the value of the brokerage and research services
provided--viewed in terms of that particular transaction or in terms of all the
accounts over which the Advisor exercises investment discretion. Any commission,
fee or other remuneration paid to an affiliated broker-dealer is paid in
compliance with the Investment Company's procedures adopted in accordance with
Rule 17e-1 of the 1940 Act.
With respect to brokerage commissions, if commissions are generated by a fund,
the Board reviews, at least annually, the commissions paid by a fund to evaluate
whether the commissions paid over representative periods of time were reasonable
in relation to commissions being charged by other brokers and the benefits to a
fund.
20
The trustees periodically review the Advisor's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of each fund and review the prices paid by the fund over representative
periods of time to determine if such prices are reasonable in relation to the
benefits provided to the fund. Certain services received by the Advisor
attributable to a particular fund transaction may benefit one or more other
accounts for which the Advisor exercises investment discretion, or an investment
portfolio other than that for which the transaction was effected. The Advisor's
fees are not reduced by the Advisor's receipt of such brokerage and research
services.
The following information with respect to brokerage pertains to the
Institutional Class:
During the fiscal year ended August 31, 2002, the fund purchased securities
issued by the following regular brokers or dealers, as defined by Rule 10b-1 of
the 1940 Act, each of which is one of the fund's ten largest brokers or dealers
by dollar amounts of securities executed or commissions received on behalf of
the fund. The value of broker-dealer securities held and the commissions paid
(if any) as of August 31, 2002, are as follows:

The Prime Money Market Fund normally does not pay a stated brokerage commission
on transactions.
PRICING OF FUND SHARES
Class T Shares are offered without a sales commission by State Street Global
Markets, LLC (the Distributor), to institutional investors which in a fiduciary
or agency capacity. The fund determines net asset value per share once each
business day at 4 p.m. Eastern time.
A business day is one on which the New York Stock Exchange is open. Pricing does
not occur on non-business days. Currently, the fund is open every weekday except
New Year's Day, Martin Luther King, Jr. Day, President's Day, Memorial Day, Good
Friday, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The
New York Stock Exchange may close early on certain days, such as Christmas Eve
and New Year's Eve and before certain other holidays. Please contact your SSgA
Funds account representative if you have questions on early Exchange closing
times.
It is the fund's policy to use its best efforts to maintain a constant price per
share of $1.00, although there can be no assurance that the $1.00 net asset
value per share will be maintained. In accordance with this effort and pursuant
to Rule 2a-7 under the 1940 Act, the fund uses the amortized cost valuation
method to value its portfolio instruments. This method involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, even though the portfolio security may
increase or decrease in market value generally in response to changes in
interest rates. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price the fund would receive if it sold the instrument.
For example, in periods of declining interest rates, the daily yield on the
fund's shares computed by dividing the annualized daily income on the fund's
portfolio by the net asset value based upon the amortized cost valuation
technique may tend to be higher than a similar computation made by using a
method of valuation based upon market prices and estimates. In periods of rising
interest rates, the daily yield on fund shares computed the same way may tend to
be lower than a similar computation made by using a method of calculation based
upon market prices and estimates.
21
The Trustees have established procedures reasonably designed to stabilize the
fund's price per share at $1.00. These procedures include: (1) the determination
of the deviation from $1.00, if any, of the fund's net asset value using market
values; (2) periodic review by the Trustees of the amount of and the methods
used to calculate the deviation; and (3) maintenance of records of such
determination. The Trustees will promptly consider what action, if any, should
be taken if such deviation exceeds 1/2 of one percent.
The Investment Company received an exemption from Section 18(f) of the 1940 Act,
which enables it to redeem securities in kind. Therefore, a fund may pay any
portion of the redemption amount (in excess of $15 million) by a distribution in
kind of readily marketable securities from its portfolio instead of cash.
TAXES
Each fund intends to qualify for treatment as a regulated investment company
("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As a RIC, each fund will not be liable for federal income taxes on
taxable net investment income and net capital gain (long-term capital gains in
excess of short-term capital losses) that it distributes to its shareholders,
provided that the fund distributes annually to its shareholders at least 90% of
its net investment income and net short-term capital gain for the taxable year
("Distribution Requirement"). For a fund to qualify as a RIC it must abide by
all of the following requirements: (1) at least 90% of the fund's gross income
each taxable year must be derived from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stock
or securities or foreign currencies, or other income (including gains from
options, futures or forward contracts) derived with respect to its business of
investing in such stock, securities or currencies ("Income Requirement"); (2) at
the close of each quarter of the fund's taxable year, at least 50% of the value
of its total assets must be represented by cash and cash items, US Government
securities, securities of other RICs, and other securities, with such other
securities limited, in respect of any one issuer, to an amount that does not
exceed 5% of the total assets of the fund or that does not represent more than
10% of the outstanding voting securities of any one issuer; and (3) at the close
of each quarter of the fund's taxable year, not more than 25% of the value of
its assets may be invested in securities (other than US Government securities or
the securities of other RICs) of any one issuer.
Each fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year an amount at least equal to
the sum of: (1) 98% of its ordinary income for that year; (2) 98% of its capital
gain net income for the one-year period ending on October 31 of that year; and
(3) certain undistributed amounts from the preceding calendar year. For this and
other purposes, dividends declared in October, November or December of any
calendar year and made payable to shareholders of record in such month will be
deemed to have been received on December 31 of such year if the dividends are
paid by the fund subsequent to December 31 but prior to February 1 of the
following year.
If a shareholder receives a distribution taxable as a long-term gain with
respect to shares of a fund and redeems or exchanges the shares, and has held
the shares for six months or less, then any loss on the redemption or exchange
will be treated as a long-term loss to the extent of the respective capital gain
distribution.
At August 31, 2002, the Institutional Class had a net tax basis capital loss
carryover of $59,927, which may be applied against any realized net taxable
gains in each succeeding year or until its expiration date of August 31, 2009.
STATE AND LOCAL TAXES. Depending upon the extent of each fund's activities in
states and localities in which its offices are maintained, its agents or
independent contractors are located or it is otherwise deemed to be conducting
business, the fund may be subject to the tax laws of such states or localities.
The foregoing discussion is only a summary of certain federal income tax issues
generally affecting the fund and its shareholders. Circumstances among investors
may vary and each investor is encouraged to discuss investment in the fund with
the investor's tax advisor.
CALCULATION OF PERFORMANCE DATA
The fund computes average annual total return by using a standardized method of
calculation required by the Securities and Exchange Commission. Average annual
total return is computed by finding the average annual compounded rates of
return on a hypothetical initial investment of $1,000 over the one-year,
five-year and ten-year periods (or life of the funds as appropriate), that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
22
P(1+T)(TO THE POWER OF n) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a $1,000 payment made at the
beginning of the 1-year, 5-year and 10-year periods at
the end of the year or period
The calculation assumes that all dividends and distributions of the fund are
reinvested at the price stated in the Prospectus on the dividend dates during
the period, and includes all recurring and nonrecurring fees that are charged to
all shareholder accounts.
Total returns and other performance figures are based on historical earnings and
are not indicative of future performance.
The current annualized yield of the fund may be quoted in published material.
The yield is calculated daily based upon the seven days ending on the date of
calculation ("base period"). The yields are computed by determining the net
change, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the base
period, subtracting a hypothetical charge reflecting deductions from shareholder
accounts and dividing the net change in the account value by the value of the
account at the beginning of the base period to obtain the base period return,
and then multiplying the base period return by (365/7) with the resulting yield
figure carried to the nearest hundredth of one percent. An effective yield is
computed by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one share at
the beginning of the period, subtracting a hypothetical charge reflecting
deductions from shareholder accounts, and dividing the difference by the value
of the account at the beginning of the base period to obtain the base period
return, and then compounding the base period return by adding 1, raising the sum
to a power equal to 365 divided by 7, and subtracting 1 from the result,
according to the following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1)(TO THE POWER OF 365/7)]-1
The following are the Institutional Class's current and effective yields for the
seven-day period ended August 31, 2002:

Current Yield 1.71%
Effective Yield 1.72%

The yields quoted are not indicative of future results. Yields will depend on
the type, quality, maturity, and interest rate of money market instruments held
by the fund.
ADDITIONAL INFORMATION
SHAREHOLDER MEETINGS
Investment Company will not have an annual meeting of shareholders. Special
meetings may be convened: (1) by the Board of Trustees; (2) upon written request
to the Board by the holders of at least 10% of the outstanding shares; or (3)
upon the Board's failure to honor the shareholders' request described above, by
holders of at least 10% of the outstanding shares giving notice of the special
meeting to the shareholders.
CAPITALIZATION AND VOTING
Each fund share has one vote. There are no cumulative voting rights. There is no
annual meeting of shareholders, but special meetings may be held. On any matter
that affects only a particular investment fund, only shareholders of that fund
may vote unless otherwise required by the 1940 Act or the Master Trust
Agreement.
The fund share represents an equal proportionate interest in the fund, has a par
value of $.001 per share and is entitled to such relative rights and preferences
and dividends and distributions earned on the assets belonging to the fund as
may be declared by the Board of Trustees. Fund shares are fully paid and
nonassessable by Investment Company and have no preemptive rights.
23
The Investment Company does not issue share certificates for the fund. Transfer
Agent sends monthly statements to shareholders of the fund concurrent with any
transaction activity, confirming all investments in or redemptions from their
accounts. Each statement also sets forth the balance of shares held in the
account.
The Investment Company is authorized to divide shares of any fund into two or
more classes of shares. The shares of each fund may have such rights and
preferences as the Trustees may establish from time to time, including the right
of redemption (including the price, manner and terms of redemption), special and
relative rights as to dividends and distributions, liquidation rights, sinking
or purchase fund provisions and conditions under which any fund may have
separate voting rights or no voting rights. Each class of shares of a fund is
entitled to the same rights and privileges as all other classes of the fund,
except that each class bears the expenses associated with the distribution and
shareholder servicing arrangements of that class, as well as other expenses
attributable to the class and unrelated to the management of the fund's
portfolio securities. The SSgA Funds have three classes of shares. The SSgA
Prime Money Market Fund and the SSgA US Treasury Money Market Fund each have
Class T Shares. The SSgA Bond Market, Core Opportunities, Small Cap, Aggressive
Equity, International Stock Selection and Life Solutions Income and Growth, Life
Solutions Balanced and Life Solutions Growth Funds each have Class R Shares.
FEDERAL LAW AFFECTING STATE STREET
Federal laws may prohibit state chartered banks such as State Street from
engaging in the business of certain kinds of underwriting and other activities
and may impact the services provided by State Street. SSgA FUNDS SHARES ARE NOT
ENDORSED OR GUARANTEED BY STATE STREET OR ITS AFFILIATES, ARE NOT DEPOSITS OR
OBLIGATIONS OF STATE STREET OR ITS AFFILIATES, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
Changes in federal or state statutes and regulations relating to the permissible
activities of banks and their affiliates, as well as judicial or administrative
decisions or interpretations of such or future statutes and regulations, could
prevent the Advisor from continuing to perform all or a part of the above
services for its customers and/or the fund. If the Advisor were prohibited from
serving the fund in any of its present capacities, the Board of Trustees would
seek an alternative provider(s) of such services. In such event, changes in the
operation of the fund may occur. It is not expected by the Advisor that existing
shareholders would suffer any adverse financial consequences (if another advisor
with equivalent abilities is found) as a result of any of these occurrences.
PROXY VOTING POLICY
The Advisor has undertaken to vote proxies with respect to each fund's
underlying securities holdings and retains the final authority and
responsibility for such voting. The Advisor retains outside consultants for
analyses of issues and to act as voting agent. General voting guidelines are
followed for routine matters of corporate governance. If areas of concern are
discovered, the issues are examined in detail by the Advisor and voted as
determined to be in the best interest of the fund.
MASSACHUSETTS BUSINESS TRUST
The fund is a series of a "Massachusetts business trust." A copy of the First
Amended and Restated Master Trust Agreement (the Declaration of Trust) for the
Investment Company is on file in the office of the Secretary of the Commonwealth
of Massachusetts. The Declaration of Trust and the By-Laws of the Investment
Company are designed to make the Investment Company similar in most respects to
a Massachusetts business corporation. The principal distinctions between the two
forms relate to shareholder liability and are described below.
Under Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
trust. This is not the case for a Massachusetts business corporation. However,
the Declaration of Trust of the Investment Company provides that the
shareholders shall not be subject to any personal liability for the acts or
obligations of the Investment Company and that every note, bond, contract,
instrument, certificate or undertaking made on behalf of the Investment Company
shall contain a provision to the effect that the shareholders are not personally
liable thereunder.
No personal liability will attach to the shareholders under any undertaking
containing such provision when adequate notice of such provision is given,
except possibly in a few jurisdictions. With respect to all types of claims in
the latter jurisdictions, (i) tort claims, (ii) contract claims where the
provision referred to is omitted from the undertaking, (iii) claims for taxes,
and (iv) certain statutory liabilities in other jurisdictions, a shareholder may
be held personally liable to the extent that claims are not satisfied by the
Investment Company. However, upon payment of such liability, the shareholder
will been entitled to reimbursement from the general assets of the Investment
Company. The Trustees of the Investment Company intend to conduct the operations
of the Investment Company in a way as to avoid, as far as possible, ultimate
liability of the shareholders of the Investment Company.
24
The Declaration of Trust further provides that the name of the Investment
Company refers to the Trustees collectively as Trustees, not as individuals or
personally, and that no Trustee, officer, employee or agent is liable to any
third persons in connection with the affairs of the Investment Company, except
if the liability arises from his or its own bad faith, willful misfeasance,
gross negligence or reckless disregard of his or its duties to such third
persons. It also provides that all third persons shall look solely to the
property of the Investment Company for any satisfaction of claims arising in
connection with the affairs of the Investment Company. With the exceptions
stated, the Trust's Declaration of Trust provides that a Trustee, officer,
employee or agent is entitled to be indemnified against all liability in
connection with the affairs of the Investment Company.
The Investment Company shall continue without limitation of time subject to the
provisions in the Declaration of Trust concerning termination by action of the
shareholders and the Trustees upon notice to the shareholders.
FINANCIAL STATEMENTS
Audited financial statements will be available within 60 days following the end
of the fund's then current fiscal year, which ends August 31. When available,
copies of the financial statements can be obtained without charge by calling
Distributor at (800) 647-7327.
25
APPENDIX: DESCRIPTION OF SECURITIES RATINGS
RATINGS OF DEBT INSTRUMENTS
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") -- Long Term Debt Ratings.
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk appear somewhat
larger than the Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa -- Bonds which are rated Baa are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through B. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a
ranking in the lower end of that generic rating category.
STANDARD & POOR'S CORPORATION ("S&P"). The ratings are based, in varying
degrees, on the following considerations: (1) The likelihood of default --
capacity and willingness of the obligator as to the timely payment of interest
and repayment of principal in accordance with the terms of the obligation; (2)
The nature of and provisions of the obligation; and (3) The protection afforded
by, and relative position of, the obligation in the event of bankruptcy,
reorganization, or other arrangement under the laws of bankruptcy and other laws
affecting creditors' rights.
AAA -- Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A -- Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher rated
categories.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
RATINGS OF COMMERCIAL PAPER
MOODY'S. Moody's short-term debt ratings are opinions of the ability of issuers
to repay punctually senior debt obligations. These obligations have an original
maturity not exceeding one year, unless explicitly noted. Moody's employs the
following three designations, all judged to be investment grade, to indicate the
relative repayment ability of rated issuers:
Issuers rated Prime-1 (or supporting institutions) have a superior ability
for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
26
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
- Well-established access to a range of financial markets and
assured sources of alternate liquidity.
Issuers rated Prime-2 (or supporting institutions) have a strong ability
for repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternative
liquidity is maintained.
Issuers rated Prime-3 (or supporting institutions) have an acceptable
ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the
level of debt protection measurements and may require relatively high
financial leverage. Adequate alternate liquidity is maintained.
Issuers rated Not Prime do not fall within any of the Prime rating
categories.
S&P. An S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered shot-term in the relevant market. Ratings are
graded into several categories, ranging from A-1 for the highest quality
obligations to D for the lowest. These categories are as follows:
A-1 -- This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+) designation.
A-2 -- Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
FITCH'S, INC. ("FITCH"). Commercial paper rated by Fitch reflects Fitch's
current appraisal of the degree of assurance of timely payment of such debt. An
appraisal results in the rating of an issuer's paper as F-1, F-2, F-3, or F-4.
F-1 -- This designation indicates that the commercial paper is regarded as
having the strongest degree of assurance for timely payment.
F-2 -- Commercial paper issues assigned this rating reflect an assurance of
timely payment only slightly less in degree than those issues rated F-1.
27
Filed pursuant to Rule 485(b)
File Nos. 33-19229; 811-5430
SSgA FUNDS
State Street Financial Center
One Lincoln Street
Boston, Massachusetts 02111-2900
1-800-997-7327
www.ssgafunds.com
STATEMENT OF ADDITIONAL INFORMATION
US TREASURY MONEY MARKET FUND
August 25, 2003
This Statement of Additional Information is not a prospectus. Instead, it
supplements or describes in greater detail the SSgA Funds and the series named
above as contained in the prospectus dated August 25, 2003. You may obtain a
copy of the prospectus by calling 1-800-647-7327.
1
TABLE OF CONTENTS

2
FUND HISTORY
SSgA Funds (the Investment Company) was organized as a Massachusetts business
trust on October 3, 1987, and operates under a First Amended and Restated Master
Trust Agreement, dated October 13, 1993, as amended.
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS
The SSgA Funds is an open-end, management investment company which offers shares
of beneficial interest in separate portfolios, each of which is referred to as a
fund. Each SSgA Fund is diversified(1), in that at least 75% of its total assets
are represented by a variety of instruments including cash, government
securities, securities of other investment companies, and other securities
within the limitations described in the investment restrictions.
INVESTMENT STRATEGIES
To the extent consistent with its investment objective and restrictions, the
fund may invest in the following instruments and use the following investment
techniques:
MONEY MARKET INSTRUMENTS. A money market fund expects to maintain, but does not
guarantee, a net asset value of $1.00 per share for purposes of purchases and
redemptions by valuing its fund shares at "amortized cost." A money market fund
will maintain a dollar-weighted average maturity of 90 days or less. A fund will
invest in securities maturing within 397 days or less at the time of the trade
date or such other date upon which a fund's interest in a security is subject to
market action. A money market fund will follow procedures reasonably designed to
assure that the prices so determined approximate the current market value of the
fund's securities. The procedures also address such matters as diversification
and credit quality of the securities the fund purchases and were designed to
ensure compliance by the fund with the requirements of Rule 2a-7 of the
Investment Company Act of 1940 (1940 Act).
US GOVERNMENT OBLIGATIONS. The types of US Government obligations in which the
fund may at times invest include a variety of US Treasury obligations, which
differ only in their interest rates, maturities and times of issuance. The fund
may purchase US Government obligations on a forward commitment basis. The fund
may also purchase Treasury Inflation Protection Securities, a type of
inflation-indexed Treasury security. Treasury Inflation Protection Securities
provide for semiannual payments of interest and a payment of principal at
maturity which are adjusted for changes in the Consumer Price Index for All
Urban Consumers ("CPI-U").
REPURCHASE AGREEMENTS. The fund may enter into repurchase agreements with
financial institutions. Under repurchase agreements, these parties sell
securities to a fund and agree to repurchase the securities at the fund's cost
plus interest within a specified time. The securities purchased by each fund
have a total value in excess of the purchase price paid by the fund and are held
by the Custodian or another board-approved custodian bank until repurchased.
Repurchase agreements assist the fund in being invested fully while retaining
"overnight" flexibility in pursuit of investments of a longer-term nature. The
fund will limit repurchase transactions to those member banks of the Federal
Reserve System and broker-dealers whose creditworthiness is continually
monitored and found satisfactory by the Advisor.
WHEN-ISSUED TRANSACTIONS. New issues of securities are often offered on a
when-issued basis. This means that delivery and payment for the securities
normally will take place several days after the date the buyer commits to
purchase them. The payment obligation and the interest rate that will be
received on securities purchased on a when-issued basis are each fixed at the
time the buyer enters into the commitment.
The fund will make commitments to purchase when-issued securities only with the
intention of actually acquiring the securities, but a fund may sell these
securities or dispose of the commitment before the settlement date if it is
deemed advisable as a matter of investment strategy. Cash or marketable high
quality debt securities equal to the amount of the above commitments will be
segregated on the fund's records. For the purpose of determining the adequacy of
these securities the segregated securities will be valued at market. If the
market value of such securities declines, additional cash or securities will be
segregated on the fund's records on a daily basis so that the market value of
the account will equal the amount of such commitments by the fund. The fund will
not invest more than 25% of its net assets in when-issued securities.
Securities purchased on a when-issued basis and held by the fund are subject to
changes in market value based upon the public's perception of changes in the
level of interest rates. Generally, the value of such securities will fluctuate
inversely to changes in
----------
(1) With the exception of the SSgA Tuckerman Active REIT Fund, which is
non-diversified.
3
interest rates -- i.e., they will appreciate in value when interest rates
decline and decrease in value when interest rates rise. Therefore, if in order
to achieve higher interest income a fund remains substantially fully invested at
the same time that it has purchased securities on a "when-issued" basis, there
will be a greater possibility of fluctuation in the fund's net asset value.
When payment for when-issued securities is due, the fund will meet its
obligations from then-available cash flow, the sale of segregated securities,
the sale of other securities or, and although it would not normally expect to do
so, from the sale of the when-issued securities themselves (which may have a
market value greater or less than the fund's payment obligation). The sale of
securities to meet such obligations carries with it a greater potential for the
realization of capital gains, which are subject to federal income taxes.
FORWARD COMMITMENTS. The fund may contract to purchase securities for a fixed
price at a future date beyond customary settlement time consistent with the
fund's ability to manage its investment portfolio, maintain a stable net asset
value and meet redemption requests. A fund may dispose of a commitment prior to
settlement if it is appropriate to do so and realize short-term profits or
losses upon such sale. When effecting such transactions, cash or liquid high
quality debt obligations held by the fund of a dollar amount sufficient to make
payment for the portfolio securities to be purchased will be segregated on the
fund's records at the trade date and maintained until the transaction is
settled. Forward commitments involve a risk of loss if the value of the security
to be purchased declines prior to the settlement date, or if the other party
fails to complete the transaction.
ILLIQUID SECURITIES. The fund will not invest more than 10% of its net assets in
illiquid securities or securities that are not readily marketable. These
securities include repurchase agreements and time deposits of more than seven
days' duration and participation interests, floating and variable rate demand
obligations and tender option bonds as to which the fund cannot exercise a
demand feature in seven or fewer days or for which there is no secondary market.
The absence of a regular trading market for illiquid securities imposes
additional risk on investments in these securities. Illiquid securities may be
difficult to value and may often be disposed of only after considerable expense
and delay.
REVERSE REPURCHASE AGREEMENTS. The fund may enter into reverse repurchase
agreements under the circumstances described in "Investment Restrictions." Under
reverse repurchase agreements, a fund transfers possession of portfolio
securities to financial institutions in return for cash in an amount equal to a
percentage of the portfolio securities' market value and agrees to repurchase
the securities at a future date by repaying the cash with interest. The fund
retains the right to receive interest and principal payments from the securities
while they are in the possession of the financial institutions. Cash or liquid
high quality debt obligations from a fund's portfolio equal in value to the
repurchase price including any accrued interest will be segregated by the
Custodian on the fund's records while a reverse repurchase agreement is in
effect. Reverse repurchase agreements involve the risk that the market value of
securities sold by the fund may decline below the price at which it is obligated
to repurchase the securities. Reverse repurchase agreements may be used as a
means of borrowing temporarily for extraordinary or emergency purposes or to
facilitate redemptions and are not used to leverage the fund.
If the other party or "seller" defaults, a fund might suffer a loss to the
extent that the proceeds from the sale of the underlying securities and other
collateral held by the fund are less than the repurchase price and the fund's
cost associated with delay and enforcement of the repurchase agreement. In
addition, in the event of bankruptcy of the seller, a fund could suffer
additional losses if a court determines that the fund's interest in the
collateral is not enforceable.
PURCHASE OF OTHER INVESTMENT COMPANY FUNDS. The fund may seek to achieve its
investment objective by investing in the shares of other investment companies,
or exchange traded funds registered as investment companies, that have
substantially similar investment objectives and policies. Federal law restricts
the ability of one registered investment company to invest in another. As a
result, the extent to which the fund may invest in another investment company
may be limited. With respect to investments in other mutual funds, the SEC has
granted the fund an exemption from the limitations of the 1940 Act that restrict
the amount of securities of underlying mutual funds the fund may hold, provided
that certain conditions are met. The conditions requested by the SEC were
designed to address certain abuses perceived to be associated with funds of
funds, including unnecessary costs (such as sales loads, advisory fees that may
be borne by the fund and administrative costs), and undue influence by a fund of
funds over the underlying fund. The conditions apply only when the fund and its
affiliates in the aggregate own more than 3% of the outstanding shares of any
one underlying fund.
STRIPPED (ZERO COUPON) SECURITIES. The fund may invest in stripped securities,
which are zero coupon bonds, notes and debentures that: (1) do not pay current
interest and are issued at a substantial discount from par value; (2) have been
stripped of their unmatured interest coupons and receipts; or (3) pay no
interest until a stated date one or more years into the future. Stripped
securities may exhibit greater price volatility than ordinary debt securities
because of the manner in which their principal securities issued by the US
Treasury are recorded in the Federal Reserve book-entry record-keeping system.
Because stripped securities do not pay current income, their prices can be very
volatile when interest rates change. The fund may invest no more than 25% of its
assets in stripped securities that have been stripped by their holder, typically
a custodian bank or investment brokerage firm. A number of securities firms and
banks have stripped the interest coupons and resold them in custodian receipt
programs with different names such as Treasury Income Growth Receipts ("TIGRS")
and Certificates of Accrual on Treasuries ("CATS"). Privately-issued stripped
securities such as TIGRS and CATS are not themselves guaranteed by the US
Government, but the future payment of principal or interest on US Treasury
obligations which they represent is so guaranteed.
4
INVESTMENT RESTRICTIONS
The fund is subject to the following fundamental investment restrictions, which
cannot be changed without a vote of a majority of a fund's shareholders. Each
investment restriction applies at the time an investment is made. The fund will
not:
1. Invest more than 10% of its net assets in the aggregate, on an ongoing
basis, in illiquid securities or securities that are not readily
marketable, including repurchase agreements and time deposits of more
than seven days' duration.
2. Borrow money, except as a temporary measure for extraordinary or
emergency purposes or to facilitate redemptions (not for leveraging or
investment), provided that borrowings do not exceed an amount equal to
33-1/3% of the current value of the fund's assets taken at market
value, less liabilities other than borrowings. If at any time the
fund's borrowings exceed this limitation due to a decline in net
assets, such borrowings will within three days be reduced to the
extent necessary to comply with this limitation. The fund will not
purchase investments once borrowed funds (including reverse repurchase
agreements) exceed 5% of its total assets.
3. Pledge, mortgage or hypothecate its assets. However, the fund may
pledge securities having a market value (on a daily marked-to-market
basis) at the time of the pledge not exceeding 33-1/3% of the value of
the fund's total assets to secure borrowings permitted by paragraph
(2) above.
4. Make loans to any person or firm; provided, however, that the making
of a loan shall not include (i) the acquisition for investment of
bonds, debentures, notes or other evidences of indebtedness of any
corporation or government which are publicly distributed or of a type
customarily purchased by institutional investors, or (ii) the entry
into "repurchase agreements." A fund may lend its portfolio securities
to broker-dealers or other institutional investors if the aggregate
value of all securities loaned does not exceed 33-1/3% of the value of
the fund's total assets.
5. Engage in the business of underwriting securities issued by others,
except that the fund will not be deemed to be an underwriter or to be
underwriting on account of the purchase of securities subject to legal
or contractual restrictions on disposition.
6. Issue senior securities, except as permitted by its investment
objective, policies and restrictions, and except as permitted by the
1940 Act.
7. Purchase or sell puts, calls or invest in straddles, spreads or any
combination thereof.
8. Purchase or sell commodities or commodity futures contracts.
9. Purchase or sell real estate or real estate mortgage loans; provided,
however, that the fund may invest in securities secured by real estate
or interests therein or issued by companies which invest in real
estate or interests therein.
10. Make short sales of securities or purchase any securities on margin,
except for such short-term credits as are necessary for the clearance
of transactions.
11. Purchase from or sell portfolio securities to its officers or
directors or other "interested persons" (as defined in the 1940 Act)
of the fund, including their investment advisors and affiliates,
except as permitted by the 1940 Act and exemptive rules or orders
thereunder.
12. Make investments for the purpose of gaining control of an issuer's
management.
To the extent these restrictions reflect matters of operating policy which may
be changed without shareholder vote, these restrictions may be amended upon
approval by the Board of Trustees and notice to shareholders. If a percentage
restriction is adhered to at the time of investment, a subsequent increase or
decrease in a percentage resulting from a change in the values of assets will
not constitute a violation of that restriction, except as otherwise noted.
MANAGEMENT OF THE FUND
BOARD OF TRUSTEES AND OFFICERS
The Board of Trustees is responsible for overseeing generally the management,
activities and affairs of each fund and has approved contracts with various
financial organizations to provide, among other services, day-to-day management
required by the SSgA Funds (see the section called "Investment Advisory and
Other Services."). The Trustees hold office for the life of the Trust. A Trustee
may resign or retire, and may be removed at any time by a vote of two-thirds of
Investment Company shares or by a vote of a majority of
5
the Trustees. The Trustees shall promptly call and give notice of a meeting of
shareholders for the purpose of voting upon removal of any Trustee when
requested to do so in writing by holders of not less than 10% of the shares then
outstanding. A vacancy on the Board of Trustees may be filled by the vote of a
majority of the remaining Trustees, provided that immediately thereafter at
least two-thirds of the Trustees have been elected by shareholders. The Board of
Trustees as a group beneficially own less than 1% of the outstanding voting
securities the Trust. The officers, all of whom are employed by the
Administrator or its affiliates, are responsible for the day-to-day management
and administration of the SSgA Funds' operations.
COMMITTEES OF THE BOARD OF TRUSTEES. There are three standing committees of the
Board of Trustees:
- Audit Committee, which consists of Messrs. Marshall, Mastrovich, Riley,
Shirk, Taber, and Todd, met two times during the last fiscal year. The
purpose of the Audit Committee is to recommend the selection, retention or
termination of auditors and, in connection therewith, to evaluate the
independence of the auditors, including whether the auditors provide any
consulting services to the manager, and to receive the auditors' specific
representations as to their independence; meet with the Funds' independent
auditors, including private meetings, as necessary (i) to review the
arrangements for and scope of the annual audit and any special audits; (ii)
to discuss any matters of concern relating to the Funds' financial
statements, including any adjustments to such statements recommended by the
auditors, or other results of said audit(s); (iii) to consider the
auditors' comments with respect to the Funds' financial policies,
procedures and internal accounting controls and management's responses
thereto; and (iv) to review the form of opinion the auditors propose to
render to the Board and shareholders; consider the effect upon the Funds of
any changes in accounting principles or practices proposed by management or
the auditors; review the fees charged by the auditors for audit and
non-audit services; investigate improprieties or suspected improprieties in
fund operations; report its activities to the full Board on a regular basis
and to make such recommendations with respect to the above and other
matters as the Committee may deem necessary or appropriate; and perform
such other functions consistent with this Charter, the Trust's By-laws and
governing law, as the Audit Committee or the Board of Trustees deems
necessary or appropriate.
- The Governance Committee, which consists of Messrs. Anderson, Harbert,
Marshall, Mastrovich, Riley, Shirk, Taber and Todd, met two times during
the last fiscal year. The purpose of the Governance Committee is the review
of information and determination with respect to matters of Trustee
compensation, Trustee performance evaluation and independence of outside
counsel to the Trustees. The Governance Committee will not consider
nominees recommended by securities holders.
- The Valuation Committee, which consists of Messrs. Anderson, Harbert,
Marshall, Mastrovich, Riley, Shirk, Taber and Todd, meets as necessary as
determined by the SSgA Funds' Valuation Procedures. The Investment Company
did not convene any special meetings of the Valuation Committee during the
last fiscal year. The Investment Company has established procedures and
guidelines for valuing portfolio securities and makes fair value
determinations from time to time through the Valuation Committee, with the
assistance of the Oversight Committee, State Street Bank and Trust Company
(State Street) and SSgA Funds Management, Inc. The Valuation Committee
reviews the actions and recommendations of the Oversight Committee at each
quarterly Board of Trustees meeting and the Investment Company convenes
special meetings of the Valuation Committee as set forth in the Investment
Company's Securities Valuation Procedures.
The following lists the SSgA Funds' trustees and principal officers, mailing
addresses and ages, positions with the SSgA Funds and length of time served, and
present and principal occupations and other directorships held during the past
five years.
INTERESTED TRUSTEES

COMPENSATION
Trustees who are not officers or employees of Frank Russell Investment
Management Company, SSgA Funds Management, Inc. or their affiliates are paid
$92,500 each fiscal year and are reimbursed for travel and other expenses they
incur in attending Board meetings. As of the date of this SAI, the Trustees were
not paid pension or retirement benefits as part of Investment Company expenses.
However, the Trustees have approved a deferred compensation plan by which they
would be allowed to invest a portion of their annual trustee fee in shares of
the SSgA Funds. The Investment Company has obtained an exemptive order from the
SEC to enable it to offer this benefit. Participation by the Trustees is
optional. The Investment Company's officers are compensated by either the
Administrator or its affiliates or the Advisor and its affiliates.
The aggregate compensation information shown below is for the original SSgA US
Treasury Money Market Fund class (referred to as the "Institutional Class") for
the fiscal year ending August 31, 2002:

11
CONTROLLING AND PRINCIPAL SHAREHOLDERS
State Street Bank and Trust Company ("State Street") may from time to time
have discretionary authority over accounts which invest in Investment Company
shares. These accounts include accounts maintained for securities lending
clients and accounts which permit the use of Investment Company portfolios as
short-term cash sweep investments. Shares purchased for all discretionary
accounts are held of record by State Street, who retains voting control of
such shares. As of July 31, 2003, State Street held of record less than 25%
of the issued and outstanding shares of any class of shares of the fund in
connection with its discretionary accounts. Consequently, State Street is not
deemed to be a controlling person of Investment Company for purposes of the
1940 Act.
The Trustees and officers of Investment Company, as a group, own less than 1% of
any class of shares of the fund's voting securities.
Frank Russell Investment Management Company ("Administrator"), Investment
Company's administrator, will be the sole shareholder of the Class T Shares of
the fund until such time as the fund has public shareholders and therefore may
be deemed a controlling person.
As of July 31, 2003, the following shareholders owned of record 5% or more of
the issued and outstanding shares of the Institutional Class of the fund.
Such shares may be held pursuant to a shareholder servicing arrangement in
omnibus accounts for underlying shareholders:
- GFAS Control Account MT01-State Street Bank, PO Box 1992, Quincy, MA
02171--70.70%
- Fiduciary Investors Services, Turtle & Co., PO Box 9427, Boston, MA
02209-9427--14.31%
INVESTMENT ADVISORY AND OTHER SERVICES
ADVISOR
SSgA Funds Management, Inc. (the Advisor) serves as the SSgA Funds' investment
advisor pursuant to an Advisory Agreement dated May 1, 2001 (the Advisory
Agreement). The Advisor is a wholly owned subsidiary of State Street
Corporation, a publicly held bank holding company. The Advisor, State Street,
and other advisory affiliates of State Street make up State Street Global
Advisors (SSgA), the investment management arm of State Street Corporation.
State Street, the SSgA Funds' Custodian and Transfer and Dividend Paying Agent,
and State Street Global Markets, LLC, the Funds' Distributor, are affiliated
persons of the Advisor. The address of the Advisor is State Street Financial
Center, One Lincoln Street, Boston, MA 02111-2900. State Street Corporation's
address is 225 Franklin Street, Boston, MA 02110.
The Advisory Agreement will continue from year to year provided that a majority
of the Trustees who are not interested persons of the fund and either a majority
of all Trustees or a majority of the shareholders of the fund approve its
continuance. The Advisory Agreement may be terminated by the Advisor or a fund
without penalty upon sixty days' notice and will terminate automatically upon
its assignment.
Under the Advisory Agreement, the Advisor directs each Fund's investments in
accordance with its investment objective, policies and limitations. For these
services, the fund pays an annual management fee to the Advisor. The management
fee rate is a percentage of the average daily net asset value of the fund,
calculated daily and paid monthly.
The management fee of the Class T Shares is the same as the management fee of
the Institutional Class. Therefore, the management fee is allocated equally
among classes and shareholders.
The Institutional Class accrued the following expenses to Advisor for the fiscal
years ended August 31 (and for period prior to May 1, 2001, to the Institutional
Class's previous advisor):

12
The Advisor contractually agreed to waive .15% of its .25% Institutional Class
management fee until December 31, 2010. The waiver amounted to $1,915,301 in
fiscal 2002, $1,912,971 in fiscal 2001 and $1,045,420 for fiscal 2000. In
addition, the Advisor contractually agreed to reimburse the fund for all
expenses in excess of .20% of average daily net assets on an annual basis, which
amounted to $0 in fiscal 2002, $275,650 in fiscal 2001 and $827,844 in fiscal
2000. The Advisor has contractually agreed to the reimbursement through December
31, 2003.
APPROVAL OF THE ADVISORY AGREEMENT. At a meeting held on April 8, 2003, the
Board of Trustees, including a majority of the members of the board who are not
"interested persons" of the Investment Company (the "Independent Trustees"),
approved the continuation of the Advisory Agreement between the Advisor and the
SSgA Funds. In considering the continuation of the Advisory Agreement, the Board
of Trustees reviewed a variety of materials relating to the SSgA Funds and the
Advisor, including the advisory fees charged and any related expense
limitations, total expenses and expense ratios and performance of each fund
relative to other similar mutual funds for one, three and five year periods. The
Trustees also considered the profitability of the Advisor with respect to the
services it renders to the funds under the Advisory Agreement and the
profitability of the Advisor's affiliated companies with respect to the services
provided to the Funds by such affiliated companies. The Trustees reviewed
materials describing the Advisor's personnel and operations, including its
investment management and its compliance capabilities and undertakings. The
Trustees considered, among other things, the services provided under the
Advisory Agreement and other services that the Advisor and its affiliates
provide to the Investment Company; the complexity of those services, both on an
absolute basis and relative to other mutual fund complexes; the manner in which
the Advisor discharges these services; the financial strength of the Advisor;
the organization and compensation structure of the Advisor, including staff
experience and qualifications; and the process by which investment decisions are
made. Much of the material was assembled and provided by Lipper Inc., an
independent service provider engaged to provide the Board of Trustees with
objective materials for this extremely important annual review. The Independent
Trustees met among themselves and separately with representatives of the Advisor
to evaluate this information. At these meetings, the Independent Trustees were
separately represented by independent counsel.
After considering the foregoing materials and factors, as well as others, the
Board of Trustees concluded that approval of the Advisory Agreement would be in
the interests of the funds and their shareholders because: (a) over a period of
years the performance of each fund compares favorably, or very favorably, to
that of similar mutual funds; and (b) the Advisor's fees and expense ratios for
each fund compare very favorably to those of similar mutual funds and are
exceptionally reasonable in relation to the services provided to the Investment
Company. The Trustees concluded that the profitability of the Advisor and its
affiliates with respect to services provided by them to the funds was not
excessive.
The Trustees are very satisfied with the Advisor's ongoing compliance efforts
and undertakings, its responsiveness to any concerns expressed by Trustees
regarding the management of the funds and with the Advisor's overall
consistently excellent and cost-efficient performance. The Trustees believe that
their efforts throughout the year help assure that the best interests of the
funds and their shareholders are always considered in connection with the
day-to-day operations of a large diverse family of funds.
ADMINISTRATOR
Frank Russell Investment Management Company (the Administrator) serves as the
Investment Company's administrator, pursuant to an Administration Agreement
dated April 12, 1988 (the Administration Agreement).
The Administrator is a wholly owned subsidiary of Frank Russell Company. Frank
Russell Company was founded in 1936 and has provided comprehensive asset
management consulting services since 1969 for institutional pools of investment
assets, principally those of large corporate employee benefit plans. Frank
Russell Company and its affiliates have offices in Tacoma, Winston-Salem, New
York City, Toronto, London, Paris, Tokyo, Sydney, Singapore, Auckland and
Geneva, and have approximately 1,400 officers and employees. The Administrator's
and Frank Russell Company's mailing address is 909 A Street, Tacoma, WA 98402.
Frank Russell Company is an independently operated subsidiary of The
Northwestern Mutual Life Insurance Company.
Pursuant to the Administration Agreement with Investment Company, the
Administrator will: (1) supervise all aspects of the fund's operations; (2)
provide the fund with administrative and clerical services, including the
maintenance of certain of the fund's books and records; (3) arrange the periodic
updating of the fund's prospectuses and any supplements thereto; (4) provide
proxy materials and reports to fund shareholders and the Securities and Exchange
Commission; (5) provide the fund with adequate office space and all necessary
office equipment and services, including telephone service, heat, utilities,
stationery supplies and similar items; and (6) prepare monthly fact sheets for
each portfolio of the Investment Company. For all services provided by the
Administrator pursuant to the Administration Agreement, the SSgA Funds pay the
Administrator an annual fee equal to the sum of the products of the average
daily net assets for each fund multiplied by the following percentages:
13
MONEY MARKET PORTFOLIOS
3.15 basis points up to and including $15 billion; 2.9 basis points thereafter
US EQUITY PORTFOLIOS
3.15 basis points up to and including $2 billion; 2.9 basis points thereafter
US FIXED INCOME PORTFOLIOS
3.15 basis points up to and including $1 billion; 2.9 basis points thereafter
INTERNATIONAL PORTFOLIOS
7.0 basis points up to and including $1 billion; 5.0 basis points thereafter
FEEDER PORTFOLIOS(1)
3.15 basis points up to and including $1 billion; 1.0 basis points thereafter
For purposes of determining the breakpoints in calculating the fees above, the
assets will be aggregated.
In addition, the Administrator charges a flat fee of $30,000 per year if the
fund has less than $500 million in assets under management.
The percentage of the fee paid by a particular fund is equal to the percentage
of average aggregate daily net assets that are attributable to that fund. The
Administrator will also receive reimbursement of expenses it incurs in
connection with establishing new investment portfolios. The Administration
Agreement will continue from year to year provided that a majority of the
Trustees and a majority of the Trustees who are not interested persons of each
fund and who have no direct or indirect financial interest in the operation of
the Distribution Plan described below or the Administration Agreement approve
its continuance. The Agreement may be terminated by the Administrator or any
fund without penalty upon sixty days' notice and will terminate automatically
upon its assignment.
The Institutional Class accrued the following expenses to Administrator for the
fiscal years ended August 31:

CUSTODIAN AND TRANSFER AGENT
State Street serves as the Custodian and Transfer and Dividend Paying Agent for
the Investment Company. State Street also provides the basic portfolio
recordkeeping required by the Investment Company for regulatory and financial
reporting purposes. For its services as Custodian, State Street is paid an
annual fee in accordance with the following with respect to the all funds other
than international funds, feeder funds and the LifeSolutions Funds:
- Portfolio Administration. A fee payable monthly on a pro rata basis, based
on the following percentages of average daily net assets of each fund: $0
up to $1.5 billion--0.02%, $1.5 billion to $20 billion--0.015%; $20 billion
to $30 billion--.01%; over $30 billion--.0075% (for purposes of calculating
the break point, the assets of individual portfolios are aggregated);
- Multiple Class Fee--$18,000 per class;
- Portfolio Trading (per transaction). Fed book entry trade--$10; Depository
Trust Company trade--$6; physical trade--$25; each NY Fed maturity--$8; all
option trading, futures trading, and other trades--$25; incoming Fed
wires--$4.70; outgoing Fed wires--$4.55;
- Pricing. Monthly pricing fees of $375 per investment portfolio and from $4
to $16 per security, depending on the type of instrument and the pricing
service used;
- Yield Calculation. $350 per month;
----------
(1) The fee applicable to Feeder Portfolios shall apply for so long as all
investable assets of the applicable fund are invested in another investment
company with substantially the same investment objectives and policies. The
fee would revert to the appropriate fee, classified by fund type, should the
fund cease operating as a Feeder Portfolio.
14
- Earnings Credit. A balance credit is applied against the custody fees
(excluding out-of-pocket expenses). The credit is based on 90% of the
average 90-day Treasury bill rate for the month, times the average
collected balance in the custodian demand deposit account for the month
billed;
- On-line Service Charges, Accounting--$80 per month per fund; and
- Out of Pocket Expenses at Cost. Include but are not limited to: postage,
transfer fees, stamp duties, government taxes, wire fees, telexes, freight,
telephones, etc.
For Transfer and Dividend Paying Agent services, State Street is paid the
following annual account services fees: $13.35 open account fee; $2.57 closed
account fee; $1.85 investor fee; $3.09 CDSC fee; and $20,000 fund minimum. State
Street is also paid the following activity based fees: $3 telephone call fee; $5
teleservicing fee; $5 telephone transaction fee for purchases or redemptions; $5
fulfillment fee; $10 IRA custodial fee for annual maintenance per IRA account;
and charges related to compliance and regulatory services of 15 cents per
non-networked level 3 account, 5 cents for each foreign account annually and a
minimum monthly fee of $200 for each management company. Portfolio fees are
allocated to each fund based on the average net asset value of each fund and are
billable on a monthly basis at the rate of 1/12 of the annual fee. State Street
is reimbursed by each fund for supplying certain out-of-pocket expenses
including confirmation statements, investor statements, banking fees, postage,
forms, audio response, telephone, records retention, customized
programming/enhancements, reports, transcripts, microfilm, microfiche, and
expenses incurred at the specific direction of the fund.
DISTRIBUTOR
State Street Global Markets, LLC (the Distributor) serves as the distributor of
fund shares pursuant to a Distribution Agreement dated March 1, 2002, as amended
("Distribution Agreement"). The Distributor is a wholly owned subsidiary of
State Street Corporation. The Advisor, Custodian and Transfer Agent are also
wholly owned subsidiaries of State Street Corporation. The Distributor's mailing
address is State Street Financial Center, OneLincoln Street, Boston, MA
02111-2900.
CODE OF ETHICS
The Advisor, Distributor, Custodian, Transfer Agent, Administrator and
Investment Company have each adopted a code of ethics (the Investment Company
code being referred to herein as the Code of Ethics) under Rule 17j-1 of the
1940 Act. The Code of Ethics, by relying on the codes of the underlying service
providers, permits personnel of the above-named service providers or officers of
the Investment Company, subject to the provisions of the relevant code of
ethics, to invest in securities, including securities that may be purchased or
held by the Advisor or the Investment Company. Under the relevant code of
ethics, all employees or officers who are deemed to be access persons (persons
who have interaction with funds or accounts managed by the Advisor as part of
their job function) must pre-clear personal securities transactions. Each code
of ethics is designed to ensure that employees conduct their personal securities
transactions in a manner that does not create an actual or potential conflict of
interest to the business or fiduciary responsibilities of the Investment
Company's service providers or officers. In addition, the Code of Ethics
establishes standards prohibiting the trading in or recommending of securities
based on material, nonpublic information or the divulgence of such information
to others.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICING ARRANGEMENTS
DISTRIBUTION PLAN. Under the 1940 Act, the Securities and Exchange Commission
has adopted Rule 12b-1, which regulates the circumstances under which a fund
may, directly or indirectly, bear distribution and shareholder servicing
expenses. Rule 12b-1 provides that a fund may pay for such expenses only
pursuant to a plan adopted in accordance with the Rule. Accordingly, the fund
has adopted an active distribution service plan providing payment to the
Distributor for various distribution, shareholder and administrative services up
to the plan limit
In connection with the Trustees' consideration of whether to adopt the
distribution plan, the Distributor, as the fund's principal underwriter,
represented to the Trustees that the Distributor believes that the Distribution
Plan should result in increased sales and asset retention for the fund by
enabling the fund to reach and retain more investors and servicing agents (such
as brokers, banks, financial planners, investment advisors and other financial
institutions), although it is impossible to know for certain in the absence of a
Distribution Plan or under an alternative distribution arrangement, the level of
sales and asset retention that a fund would have. Accordingly, the Board of
Trustees adopted a distribution plan on January 8, 1992, which was restated to
reflect the change of distributor and to update current operations on April 9,
2002, for the original SSgA Funds' class (referred to herein as the
Institutional Class). The Board of Trustees adopted a distribution plan for
Class T Shares of the fund on July 14, 2003 (the Plan) which is similar
15
in all material respects to the distribution plan for the Institutional Class,
other than with respect to the limitation on distribution and shareholder
servicing fees.
Under the Plan each fund pays the Distributor a fee not to exceed 0.55% of the
fund's average net asset value per year, for distribution, shareholder and
administrative services provided to the fund by the Distributor and Financial
Intermediaries. The Distributor pays Financial Intermediaries for shareholder
and administrative services provided to a fund out of the fee the Distributor
receives from the fund. Fees paid to the Financial Intermediaries providing
shareholder and administrative services to a fund are not permitted by the Plan
to exceed .50% of the fund's average net asset value per year. Payments to the
Distributor for distribution and shareholder services to a fund are not
permitted by the Plan to exceed 0.05% of the fund's average daily net asset
value per year. Any payments that are required to be made to the Distributor or
Financial Intermediaries that cannot be made because of the limitations
contained in the Plan may be carried forward and paid in the following two
fiscal years so long as the Plan is in effect.
The Plan does not provide for the fund to be charged for interest, carrying or
any other financing charges on any distribution expenses carried forward to
subsequent years. A quarterly report of the amounts expended under the Plan, and
the purposes for which such expenditures were incurred, must be made to the
Trustees for their review. The Plan may not be amended without shareholder
approval to increase materially the distribution or shareholder servicing costs
that the fund may pay. The Plan and material amendments to it must be approved
annually by all of the Trustees and by the Trustees who are neither "interested
persons" (as defined in the 1940 Act) of the fund nor have any direct or
indirect financial interest in the operation of the Plan or any related
agreements.
DISTRIBUTION AND SHAREHOLDER SERVICING. Payments under the Plan are made to the
Distributor to finance activity which is intended to result in the sale and
retention of fund shares including: (1) payments made to certain broker-dealers,
investment advisors and other third-party intermediaries; (2) the costs of
prospectuses, reports to shareholders and sales literature; (3) advertising; and
(4) expenses incurred in connection with the promotion and sale of fund shares,
including Distributor's overhead expenses for rent, office supplies, equipment,
travel, communication, compensation and benefits of sales personnel.
Long-term shareholders of the fund may pay more in Rule 12b-1 fees than the
economic equivalent of the maximum front-end sales charge permitted by the
National Association of Securities Dealers, Inc.
Under the Plan, the fund and/or the Distributor may also enter into Service
Agreements with financial institutions, which may include the Advisor, to
provide shareholder servicing with respect to shares of the fund held by or for
the customers of the Financial Intermediaries. Under the Service Agreements, the
Financial Intermediaries may provide various services for such customers,
including: answering inquiries regarding the fund; assisting customers in
changing dividend options, account designations and addresses; performing
subaccounting for such customers; establishing and maintaining customer accounts
and records; processing purchase and redemption transactions; providing periodic
statements showing customers' account balances and integrating such statements
with those of other transactions and balances in the customers' other accounts
serviced by the Financial Intermediaries; arranging for bank wires transferring
customers' funds; and such other services as the customers may request in
connection with the fund, to the extent permitted by applicable statute, rule or
regulation. Financial Intermediaries may receive from the fund and/or the
Distributor, for shareholder servicing, monthly fees at a rate that shall not
exceed 0.50% per annum of the average daily net asset value of the fund's shares
owned by or for shareholders with whom the Service Organization has a servicing
relationship. Banks and other financial service firms may be subject to various
state laws, and may be required to register as dealers pursuant to state law.
16
The Institutional Class accrued the following expenses to Russell Fund
Distributors, Inc. (the distributor prior to March 1, 2002) for the fiscal years
ended August 31:

Since March 1, 2002, the Institutional Class accrued the following expenses to
the Distributor (State Street Global Markets, LLC) for the fiscal year ended
August 31:
2002
--------
$ 94,602
For fiscal 2002, these amounts are reflective of the following individual
payments:

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the Investment Company's independent
accountants. PricewaterhouseCoopers LLP is responsible for performing annual
audits of the financial statements and financial highlights in accordance with
auditing standards generally accepted in the United States of America, a review
of federal tax returns, and, pursuant to Rule 17f-2 of the 1940 Act, three
security counts. The mailing address of PricewaterhouseCoopers LLP is 160
Federal Street, Boston, MA 02110.
LEGAL COUNSEL
Goodwin Procter LLP, Exchange Place, Boston, MA 02109, provides legal services
to the SSgA Funds.
BROKERAGE PRACTICES AND COMMISSIONS
All portfolio transactions are placed on behalf of the fund by the Advisor. The
Advisor ordinarily pays commissions when it executes transactions on a
securities exchange. In contrast, there is generally no stated commission on the
purchase or sale of securities traded in the over-the-counter markets, including
most debt securities and money market instruments. Rather, the price of such
securities includes an undisclosed "commission" in the form of a mark-up or
mark-down. The cost of securities purchased from underwriters includes an
underwriting commission or concession.
Subject to the arrangements and provisions described below, the selection of a
broker or dealer to execute portfolio transactions is usually made by the
Advisor. The Advisory Agreement provides, in substance and subject to specific
directions from officers of Investment Company, that in executing portfolio
transactions and selecting brokers or dealers, the principal objective is to
seek the
----------
(1) Other expenses may include such items as compensation for travel,
conferences and seminars for staff, subscriptions, office charges and
professional fees.
17
best overall terms available to the fund. Ordinarily, securities will
be purchased from primary markets, and the Advisor will consider all factors it
deems relevant in assessing the best overall terms available for any
transaction, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, for the specific
transaction and other transactions on a continuing basis.
The Advisory Agreement authorizes the Advisor to select brokers or dealers
(including affiliates) to arrange for the purchase and sale of fund securities,
including principal transactions. In evaluating the best overall terms
available, the Advisor is also authorized to consider the "brokerage and
research services" (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the fund and/or the Advisor (or its
affiliates). The Advisor selects brokers, including affiliates, for the purchase
and sale of fund securities which in the Advisor's best judgment provide prompt
and reliable execution of orders at favorable prices and reasonable commission
rates. Subject to that primary consideration, dealers may be selected for
research, statistical or other services to enable the fund to supplement its own
research and analysis. Research services generally include services which assist
investment professionals in their investment decision-making process, including
information concerning securities or indexes, performance, technical market
action, pricing, risk measurement, corporate responsibility and proxy issues, in
addition to political and economic developments.
The Advisor is authorized to cause the fund to pay a commission to a broker or
dealer who provides such brokerage and research services for executing a
portfolio transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction. The fund or
the Advisor, as appropriate, must determine in good faith that such commission
was reasonable in relation to the value of the brokerage and research services
provided--viewed in terms of that particular transaction or in terms of all the
accounts over which the Advisor exercises investment discretion. Any commission,
fee or other remuneration paid to an affiliated broker-dealer is paid in
compliance with the Investment Company's procedures adopted in accordance with
Rule 17e-1 of the 1940 Act.
With respect to brokerage commissions, if commissions are generated by a fund,
the Board reviews, at least annually, the commissions paid by a fund to evaluate
whether the commissions paid over representative periods of time were reasonable
in relation to commissions being charged by other brokers and the benefits to a
fund.
The trustees periodically review the Advisor's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of each fund and review the prices paid by the fund over representative
periods of time to determine if such prices are reasonable in relation to the
benefits provided to the fund. Certain services received by the Advisor
attributable to a particular fund transaction may benefit one or more other
accounts for which the Advisor exercises investment discretion, or an investment
portfolio other than that for which the transaction was effected. The Advisor's
fees are not reduced by the Advisor's receipt of such brokerage and research
services.
The following information with respect to brokerage pertains to the
Institutional Class:
During the fiscal year ended August 31, 2002, the fund purchased securities
issued by the following regular brokers or dealers, as defined by Rule 10b-1 of
the 1940 Act, each of which is one of the fund's ten largest brokers or dealers
by dollar amounts of securities executed or commissions received on behalf of
the fund. The value of broker-dealer securities held and the commissions paid
(if any) as of August 31, 2002, are as follows:
18

The US Treasury Money Market Fund normally does not pay a stated brokerage
commission on transactions.
PRICING OF FUND SHARES
Class T Shares of the funds are offered without a sales commission by State
Street Global Markets, LLC (the Distributor), to institutional and retail
investors which invest for their own account or in a fiduciary or agency
capacity. The fund determines net asset value per share once each business day
as of 3 p.m. Eastern time.
A business day is one on which the New York Stock Exchange is open. Pricing does
not occur on non-business days. Currently, the fund is open every weekday except
New Year's Day, Martin Luther King, Jr. Day, President's Day, Memorial Day, Good
Friday, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The
New York Stock Exchange may close early on certain days, such as Christmas Eve
and New Year's Eve and before certain other holidays. Please contact your SSgA
Funds account representative if you have questions on early Exchange closing
times.
It is the fund's policy to use its best efforts to maintain a constant price per
share of $1.00, although there can be no assurance that the $1.00 net asset
value per share will be maintained. In accordance with this effort and pursuant
to Rule 2a-7 under the 1940 Act, the fund uses the amortized cost valuation
method to value its portfolio instruments. This method involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, even though the portfolio security may
increase or decrease in market value generally in response to changes in
interest rates. While this method provides certainty in valuation, it may result
in periods during which value, as determined by amortized cost, is higher or
lower than the price the fund would receive if it sold the instrument.
For example, in periods of declining interest rates, the daily yield on the
fund's shares computed by dividing the annualized daily income on the fund's
portfolio by the net asset value based upon the amortized cost valuation
technique may tend to be higher than a similar computation made by using a
method of valuation based upon market prices and estimates. In periods of rising
interest rates, the daily yield on fund shares computed the same way may tend to
be lower than a similar computation made by using a method of calculation based
upon market prices and estimates.
The Trustees have established procedures reasonably designed to stabilize the
fund's price per share at $1.00. These procedures include: (1) the determination
of the deviation from $1.00, if any, of the fund's net asset value using market
values; (2) periodic review by the Trustees of the amount of and the methods
used to calculate the deviation; and (3) maintenance of records of such
determination. The Trustees will promptly consider what action, if any, should
be taken if such deviation exceeds 1/2 of one percent.
The Investment Company received an exemption from Section 18(f) of the 1940 Act,
which enables it to redeem securities in kind. Therefore, a fund may pay any
portion of the redemption amount (in excess of $15 million) by a distribution in
kind of readily marketable securities from its portfolio instead of cash.
19
TAXES
Each fund intends to qualify for treatment as a regulated investment company
("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As a RIC, each fund will not be liable for federal income taxes on
taxable net investment income and net capital gain (long-term capital gains in
excess of short-term capital losses) that it distributes to its shareholders,
provided that the fund distributes annually to its shareholders at least 90% of
its net investment income and net short-term capital gain for the taxable year
("Distribution Requirement"). For a fund to qualify as a RIC it must abide by
all of the following requirements: (1) at least 90% of the fund's gross income
each taxable year must be derived from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stock
or securities or foreign currencies, or other income (including gains from
options, futures or forward contracts) derived with respect to its business of
investing in such stock, securities or currencies ("Income Requirement"); (2) at
the close of each quarter of the fund's taxable year, at least 50% of the value
of its total assets must be represented by cash and cash items, US Government
securities, securities of other RICs, and other securities, with such other
securities limited, in respect of any one issuer, to an amount that does not
exceed 5% of the total assets of the fund or that does not represent more than
10% of the outstanding voting securities of any one issuer; and (3) at the close
of each quarter of the fund's taxable year, not more than 25% of the value of
its assets may be invested in securities (other than US Government securities or
the securities of other RICs) of any one issuer.
Each fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year an amount at least equal to
the sum of: (1) 98% of its ordinary income for that year; (2) 98% of its capital
gain net income for the one-year period ending on October 31 of that year; and
(3) certain undistributed amounts from the preceding calendar year. For this and
other purposes, dividends declared in October, November or December of any
calendar year and made payable to shareholders of record in such month will be
deemed to have been received on December 31 of such year if the dividends are
paid by the fund subsequent to December 31 but prior to February 1 of the
following year.
If a shareholder receives a distribution taxable as a long-term gain with
respect to shares of a fund and redeems or exchanges the shares, and has held
the shares for six months or less, then any loss on the redemption or exchange
will be treated as a long-term loss to the extent of the respective capital gain
distribution.
STATE AND LOCAL TAXES. Depending upon the extent of each fund's activities in
states and localities in which its offices are maintained, its agents or
independent contractors are located or it is otherwise deemed to be conducting
business, the fund may be subject to the tax laws of such states or localities.
The foregoing discussion is only a summary of certain federal income tax issues
generally affecting the fund and its shareholders. Circumstances among investors
may vary and each investor is encouraged to discuss investment in the fund with
the investor's tax advisor.
CALCULATION OF PERFORMANCE DATA
The fund computes average annual total return by using a standardized method of
calculation required by the Securities and Exchange Commission. Average annual
total return is computed by finding the average annual compounded rates of
return on a hypothetical initial investment of $1,000 over the one-year,
five-year and ten-year periods (or life of the funds as appropriate), that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1+T)(TO THE POWER OF n) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a $1,000 payment made at the
beginning of the 1-year, 5-year and 10-year periods at the
end of the year or period
The calculation assumes that all dividends and distributions of the fund are
reinvested at the price stated in the Prospectus on the dividend dates during
the period, and includes all recurring and nonrecurring fees that are charged to
all shareholder accounts.
20
Total returns and other performance figures are based on historical earnings and
are not indicative of future performance.
The current annualized yield of the fund may be quoted in published material.
The yield is calculated daily based upon the seven days ending on the date of
calculation ("base period"). The yields are computed by determining the net
change, exclusive of capital changes, in the value of a hypothetical
pre-existing account having a balance of one share at the beginning of the base
period, subtracting a hypothetical charge reflecting deductions from shareholder
accounts and dividing the net change in the account value by the value of the
account at the beginning of the base period to obtain the base period return,
and then multiplying the base period return by (365/7) with the resulting yield
figure carried to the nearest hundredth of one percent. An effective yield is
computed by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one share at
the beginning of the period, subtracting a hypothetical charge reflecting
deductions from shareholder accounts, and dividing the difference by the value
of the account at the beginning of the base period to obtain the base period
return, and then compounding the base period return by adding 1, raising the sum
to a power equal to 365 divided by 7, and subtracting 1 from the result,
according to the following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1)(TO THE POWER OF 365/7)]-1
The following are the Institutional Class's current and effective yields for the
seven-day period ended August 31, 2002:

Current Yield 1.63%
Effective Yield 1.64%

The yields quoted are not indicative of future results. Yields will depend on
the type, quality, maturity, and interest rate of money market instruments held
by the fund.
ADDITIONAL INFORMATION
SHAREHOLDER MEETINGS
Investment Company will not have an annual meeting of shareholders. Special
meetings may be convened: (1) by the Board of Trustees; (2) upon written request
to the Board by the holders of at least 10% of the outstanding shares; or (3)
upon the Board's failure to honor the shareholders' request described above, by
holders of at least 10% of the outstanding shares giving notice of the special
meeting to the shareholders.
CAPITALIZATION AND VOTING
Each fund share has one vote. There are no cumulative voting rights. There is no
annual meeting of shareholders, but special meetings may be held. On any matter
that affects only a particular investment fund, only shareholders of that fund
may vote unless otherwise required by the 1940 Act or the Master Trust
Agreement.
The fund share represents an equal proportionate interest in the fund, has a par
value of $.001 per share and is entitled to such relative rights and preferences
and dividends and distributions earned on the assets belonging to the fund as
may be declared by the Board of Trustees. Fund shares are fully paid and
nonassessable by Investment Company and have no preemptive rights.
The Investment Company does not issue share certificates for the fund. Transfer
Agent sends monthly statements to shareholders of the fund concurrent with any
transaction activity, confirming all investments in or redemptions from their
accounts. Each statement also sets forth the balance of shares held in the
account.
The Investment Company is authorized to divide shares of any fund into two or
more classes of shares. The shares of each fund may have such rights and
preferences as the Trustees may establish from time to time, including the right
of redemption (including the price, manner and terms of redemption), special and
relative rights as to dividends and distributions, liquidation rights, sinking
or purchase fund provisions and conditions under which any fund may have
separate voting rights or no voting rights. Each class of shares of a fund is
entitled to the same rights and privileges as all other classes of the fund,
except that each class bears the expenses associated with the distribution and
shareholder servicing arrangements of that class, as well as other expenses
attributable to the class and unrelated to the management of the fund's
portfolio securities. The SSgA Funds have three classes of shares. The SSgA
Prime Money Market Fund and the SSgA US Treasury Money Market Fund each have
Class T Shares. The SSgA Bond Market, Core Opportunities, Small Cap, Aggressive
Equity, International Stock Selection and Life Solutions Income and Growth, Life
Solutions Balanced and Life Solutions Growth Funds each have Class R Shares.
21
FEDERAL LAW AFFECTING STATE STREET
Federal laws may prohibit state chartered banks such as State Street from
engaging in the business of certain kinds of underwriting and other activities
and may impact the services provided by State Street. SSgA FUNDS SHARES ARE NOT
ENDORSED OR GUARANTEED BY STATE STREET OR ITS AFFILIATES, ARE NOT DEPOSITS OR
OBLIGATIONS OF STATE STREET OR ITS AFFILIATES, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
Changes in federal or state statutes and regulations relating to the permissible
activities of banks and their affiliates, as well as judicial or administrative
decisions or interpretations of such or future statutes and regulations, could
prevent the Advisor from continuing to perform all or a part of the above
services for its customers and/or the fund. If the Advisor were prohibited from
serving the fund in any of its present capacities, the Board of Trustees would
seek an alternative provider(s) of such services. In such event, changes in the
operation of the fund may occur. It is not expected by the Advisor that existing
shareholders would suffer any adverse financial consequences (if another advisor
with equivalent abilities is found) as a result of any of these occurrences.
PROXY VOTING POLICY
The Advisor has undertaken to vote proxies with respect to each fund's
underlying securities holdings and retains the final authority and
responsibility for such voting. The Advisor retains outside consultants for
analyses of issues and to act as voting agent. General voting guidelines are
followed for routine matters of corporate governance. If areas of concern are
discovered, the issues are examined in detail by the Advisor and voted as
determined to be in the best interest of the fund.
MASSACHUSETTS BUSINESS TRUST
The fund is a series of a "Massachusetts business trust." A copy of the First
Amended and Restated Master Trust Agreement (the Declaration of Trust) for the
Investment Company is on file in the office of the Secretary of the Commonwealth
of Massachusetts. The Declaration of Trust and the By-Laws of the Investment
Company are designed to make the Investment Company similar in most respects to
a Massachusetts business corporation. The principal distinctions between the two
forms relate to shareholder liability and are described below.
Under Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
trust. This is not the case for a Massachusetts business corporation. However,
the Declaration of Trust of the Investment Company provides that the
shareholders shall not be subject to any personal liability for the acts or
obligations of the Investment Company and that every note, bond, contract,
instrument, certificate or undertaking made on behalf of the Investment Company
shall contain a provision to the effect that the shareholders are not personally
liable thereunder.
No personal liability will attach to the shareholders under any undertaking
containing such provision when adequate notice of such provision is given,
except possibly in a few jurisdictions. With respect to all types of claims in
the latter jurisdictions, (i) tort claims, (ii) contract claims where the
provision referred to is omitted from the undertaking, (iii) claims for taxes,
and (iv) certain statutory liabilities in other jurisdictions, a shareholder may
be held personally liable to the extent that claims are not satisfied by the
Investment Company. However, upon payment of such liability, the shareholder
will been entitled to reimbursement from the general assets of the Investment
Company. The Trustees of the Investment Company intend to conduct the operations
of the Investment Company in a way as to avoid, as far as possible, ultimate
liability of the shareholders of the Investment Company.
The Declaration of Trust further provides that the name of the Investment
Company refers to the Trustees collectively as Trustees, not as individuals or
personally, and that no Trustee, officer, employee or agent is liable to any
third persons in connection with the affairs of the Investment Company, except
if the liability arises from his or its own bad faith, willful misfeasance,
gross negligence or reckless disregard of his or its duties to such third
persons. It also provides that all third persons shall look solely to the
property of the Investment Company for any satisfaction of claims arising in
connection with the affairs of the Investment Company. With the exceptions
stated, the Trust's Declaration of Trust provides that a Trustee, officer,
employee or agent is entitled to be indemnified against all liability in
connection with the affairs of the Investment Company.
The Investment Company shall continue without limitation of time subject to the
provisions in the Declaration of Trust concerning termination by action of the
shareholders and the Trustees upon notice to the shareholders.
22
FINANCIAL STATEMENTS
Audited financial statements will be available within 60 days following the end
of the fund's then current fiscal year, which ends August 31. When available,
copies of the financial statements can be obtained without charge by calling
Distributor at (800) 647-7327.
23
APPENDIX - DESCRIPTION OF SECURITIES RATINGS
The following is a description of the securities ratings of Duff & Phelps Credit
Rating Co. ("D&P"), Fitch Investors Service, Inc. ("Fitch"), Standard & Poor's
Corporation ("S&P"), Moody's Investors Service, Inc. ("Moody's"), IBCA Limited
and IBCA Inc. ("IBCA") and Thomson BankWatch ("Thomson").
LONG-TERM CORPORATION AND TAX-EXEMPT DEBT RATINGS
The two highest ratings of D&P for tax-exempt and corporate fixed-income
securities are AAA and AA. Securities rated AAA are of the highest credit
quality. The risk factors are considered to be negligible, being only slightly
more than for risk-free US Treasury debt. Securities rated AA are of high credit
quality. Protection factors are strong. Risk is modest but may vary slightly
from time to time because of economic conditions. The AA rating may be modified
by an addition of a plus (+) or minus (-) sign to show relative standing within
the major rating category.
The two highest ratings of Fitch for tax-exempt and corporate bonds are AAA and
AA. AAA bonds are considered to be investment grade and of the highest credit
quality. The obligor is judged to have an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events. AA bonds are considered to be investment grade and of very
high credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated F-1+. Plus (+) and minus (-) signs are used with the AA rating symbol to
indicate relative standing within the rating category.
The two highest ratings of S&P for tax-exempt and corporate bonds are AAA and
AA. Bonds rated AAA bear the highest rating assigned by S&P to a debt obligation
and the AAA rating indicates in its opinion an extremely strong capacity to pay
interest and repay principal. Bonds rated AA by S&P are judged by it to have a
very strong capacity to pay interest and repay principal, and they differ from
AAA issues only in small degree. The AA rating may be modified by an addition of
a plus (+) or minus (-) sign to show relative standing within the major rating
category. The foregoing ratings are sometimes followed by a "p" indicating that
the rating is provisional. A provisional rating assumes the successful
completion of the project being financed by the debt being rated and indicates
that payment of debt service requirements is largely or entirely dependent upon
the successful and timely completion of the project. This rating, however, while
addressing credit quality subsequent to completion of the project, makes no
comment on the likelihood of, or the risk of default upon failure of, such
completion.
The two highest ratings of Moody's for tax-exempt and corporate bonds are Aaa
and Aa. Tax-exempt and corporate bonds rated Aaa are judged to be of the "best
quality." The rating of Aa is assigned to bonds which are of "high quality by
all standards." Aa bonds are rated lower than Aaa bonds because margins of
protection may not be as large or fluctuations of protective elements may be of
greater amplitude or there may be other elements which make the long-term risks
appear somewhat larger. Moody's may modify a rating of Aa by adding numerical
modifiers of 1, 2 or 3 to show relative standing within the Aa category. The
foregoing ratings for tax-exempt bonds are sometimes presented in parentheses
preceded with a "con" indicating the bonds are rated conditionally. Such
parenthetical rating denotes the probable credit stature upon completion of
construction or elimination of the basis of the condition. In addition, Moody's
has advised that the short-term credit risk of a long-term instrument sometimes
carries a MIG rating or one of the commercial paper ratings described below.
The two highest ratings of IBCA for corporate bonds are AAA and AA. Obligations
rated AAA by IBCA have the lowest expectation of investment risk. Capacity for
timely repayment of principal and interest is substantial, such that adverse
changes in business, economic or financial conditions are unlikely to increase
investment risk significantly. Obligations for which there is a very low
expectation of investment risk are rated AA. IBCA may append a rating of plus
(+) or minus (-) to a rating to denote relative status within a major rating
category. IBCA does not rate tax-exempt bonds.
The two highest ratings of Thomson for corporate bonds are AAA and AA. Bonds
rated AAA are of the highest credit quality. The ability of the obligor to repay
principal and interest on a timely basis is considered to be very high. Bonds
rated AA indicate a superior ability on the part of the obligor to repay
principal and interest on a timely basis with limited incremental risk versus
issues rated in the highest category. These ratings may be modified by the
addition of a plus (+) or minus (-) sign to show relative standing within the
rating categories. Thomson does not rate tax-exempt bonds.
SHORT-TERM CORPORATE AND TAX-EXEMPT DEBT RATINGS
The highest rating of D&P for commercial paper is Duff 1. D&P employs three
designations, Duff 1 plus, Duff 1 and Duff 1 minus, within the highest rating
category. Duff 1 plus indicates highest certainty of timely payment. Short-term
liquidity, including internal
24
operating factors and/or ready access to alternative sources of funds, is judged
to be outstanding, and safety is just below risk-free US Treasury short-term
obligations. Duff 1 indicates very high certainty of timely payment. Liquidity
factors are excellent and supported by strong fundamental protection factors.
Risk factors are considered to be minor. Duff 1 minus indicates high certainty
of timely payment. Liquidity factors are strong and supported by good
fundamental protection factors. Risk factors are very small. Duff 2 indicates
good certainty of timely payment. Liquidity factors and company fundamentals are
sound. Although ongoing funding needs may enlarge total financing requirements,
access to capital markets is good. Risk factors are small.
Fitch's short-term ratings apply to tax-exempt and corporate debt obligations
that are payable on demand or have original maturities of up to three years. The
highest rating of Fitch for short-term securities encompasses both the F-1+ and
F-1 ratings. F-1+ securities possess exceptionally strong credit quality. Issues
assigned this rating are regarded as having the strongest degree of assurance
for timely payment. F-1 securities possess very strong credit quality. Issues
assigned this rating reflect an assurance of timely payment only slightly less
in degree than issues rated F-1+. F-2 securities possess good credit quality and
have a satisfactory degree of assurance for timely payment, but the margin of
safety is not as great as the F-1+ and F-1 categories.
S&P's commercial paper ratings are current assessments of the likelihood of
timely payment of debt having an original maturity of no more than 365 days. The
A-1 designation indicates that the degree of safety regarding timely payment is
strong. Those issues determined to possess extremely strong safety
characteristics will be denoted with a plus (+) designation. The A-2 designation
indicates that capacity for timely payment on these issues is satisfactory.
However, the relative degree of safety is not as high as for issues designated
A-1.
Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually promissory obligations not having an original maturity in excess of
nine months. Issuers rated Prime-1 (or related supporting institutions) in the
opinion of Moody's have a superior capacity for repayment of short-term
promissory obligations. Issuers rated Prime-2 (or related supporting
institutions) have a strong capacity for repayment of short-term promissory
obligations. This capacity will normally be evidenced by many of the
characteristics of Prime-1 rated issues, but to a lesser degree. Ample alternate
liquidity is maintained.
IBCA assesses the investment quality of unsecured debt with an original maturity
of less than one year which is issued by bank holding companies and their
principal banking subsidiaries. The designation A1 by IBCA indicates that the
obligation is supported by a very strong capacity for timely repayment. Those
obligations rated A1+ are supported by the highest capacity for timely
repayment. The designation A-2 by IBCA indicates that the obligation is
supported by a satisfactory capacity for timely payment, although such capacity
may be susceptible to adverse changes in business, economic or financial
conditions.
Thomson's short-term paper ratings assess the likelihood of an untimely payment
of principal or interest of debt having a maturity of one year or less which is
issued by banks and financial institutions. The designation TBW-1 represents the
highest short-term rating category and indicates a very high degree of
likelihood that principal and interest will be paid on a timely basis. The
designation TBW-2 represents the second highest short-term rating category and
indicates that while the degree of safety regarding timely payment of principal
and interest is strong, the relative degree of safety is not as high as for
issues rated TBW-1.
TAX-EXEMPT NOTE RATINGS
A S&P rating of SP-1 indicates very strong or strong capacity to pay principal
and interest. Those issues determined to possess overwhelming safety
characteristics are given a plus (+) designation. Notes rated SP-2 are issued by
issuers that exhibit satisfactory capacity to pay principal and interest.
Moody's ratings for state and municipal notes and other short-term obligations
are designated Moody's Investment Grade ("MIG"). MIG-1/VMIG-1 denotes best
quality. There is present strong protection from established cash flows,
superior liquidity support or demonstrated broad-based access to the market for
refinancing. MIG-2/VMIG-2 denotes high quality, with margins of protection ample
although not as large as in the MIG-1/VMIG-1 group.
Fitch uses its short-term ratings described above under "Short-Term Corporate
and Tax-Exempt Debt Ratings" for tax-exempt notes.
D&P uses the fixed-income ratings described above under "Long-Term Corporate and
Tax-Exempt Debt Ratings" for tax-exempt notes and other short-term obligations.
25
PART C: OTHER INFORMATION
Item 23. Exhibits
--------

Item 24. Persons Controlled by or Under Common Control with Registrant
-------------------------------------------------------------
None
Item 25. Indemnification
---------------
Indemnification is provided to officers and Trustees of the Registrant
pursuant to Section 6.4 of Article VI of Registrant's First Amended and Restated
Master Trust Agreement, which reads as follows:
"Section 6.4 Indemnification of Trustees, Officers, etc. The Trust shall
indemnify (from the assets of the Sub-Trust or Sub-Trusts in question) each of
its Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise [hereinafter referred to as
"Covered Person"]) against all liabilities, including but not limited to amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise with which such person may be or may
have been threatened, while in office or thereafter, or by reason of being or
having been such a Trustee or officer, director or trustee, except with respect
to any matter as to which it has been determined that such Covered Person had
acted with willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's office
(such conduct referred to hereafter as "Disabling Conduct"). A determination
that the Covered Person is entitled to indemnification may be made by (i) a
final decision on the merits by a court or other body before whom the proceeding
was brought that the person to be indemnified was not liable by reason of
Disabling Conduct, (ii) dismissal of a court action or an administrative
proceeding against a Covered Person for insufficiency of evidence of Disabling
Conduct, or (iii) a reasonable determination, based upon a review of the facts,
that the indemnitee was not liable by reason of Disabling Conduct by (a) a vote
of a majority of a quorum of Trustees who are neither "interested persons" of
the Trust as defined in section 2(a)(19) of the 1940 Act nor parties to the
proceeding, or (b) an independent legal counsel in a written opinion. Expenses,
including accountants' and counsel fees so incurred by any such Covered Person
(but excluding amounts paid in satisfaction of judgments, in compromise or as
fines or penalties), may be paid from time to time by the Sub-Trust in question
in advance of the final disposition of any such action, suit or proceeding,
provided that the Covered Person shall have undertaken to repay the amounts so
paid to the Sub-Trust in question if it is ultimately determined that
indemnification of such expenses is not authorized under this Article VI and (i)
the Covered Person shall have provided security for such undertaking, (ii) the
Trust shall be insured against losses arising by reason of any lawful advances,
or (iii) a majority of a quorum of the disinterested Trustees who are not a
party to the proceeding, or an independent legal counsel in a written opinion,
shall have determined, based on a review of readily available facts (as opposed
to a full trial-type inquiry), that there is reason to believe that the Covered
Person ultimately will be found entitled to indemnification."
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, The Registrant, the SSgA Funds, certifies that it meets
all of the requirements for effectiveness of this Post-Effective Amendment
No. 76 to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the
City of Boston, and Commonwealth of Massachusetts, on the 25th day of August,
2003.
By: /s/ Lynn L. Anderson
----------------------------------------
Lynn L. Anderson, President and
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities as
indicated on August 25, 2003.
/s/ Lynn L. Anderson
--------------------------------- President and Chairman
Lynn L. Anderson of the Board
/s/ Agustin J. Fleites
--------------------------------- Chief Executive Officer and Principal
Agustin J. Fleites Executive Officer
/s/ Timothy B. Harbert
--------------------------------- Trustee
Timothy B. Harbert
/s/ Steven J. Mastrovich
--------------------------------- Trustee
Steven J. Mastrovich
/s/ William L. Marshall
--------------------------------- Trustee
William L. Marshall
/s/ Patrick J. Riley
--------------------------------- Trustee
Patrick J. Riley
/s/ Richard D. Shirk
--------------------------------- Trustee
Richard D. Shirk
/s/ Bruce D. Taber
--------------------------------- Trustee
Bruce D. Taber
/s/ Henry W. Todd
--------------------------------- Trustee
Henry W. Todd
/s/ Mark E. Swanson
--------------------------------- Trustee
Mark E. Swanson
Exhibit Index
Exhibit Number Exhibit Name
5(q) Letter agreement incorporating the SSgA Large Cap Value and
Large Cap Growth Opportunities Funds into the Investment
Advisors Agreement
Exhibit 6(d)(i) Letter agreement incorporating the SSgA Large Cap Value and
Large Cap Growth Opportunities Funds into the Distribution
Agreement
Exhibit 6(d)(ii) Addendum to Distribution Agreement (relating to Class R
Shares)
Exhibit 8(p) Letter agreement incorporating the SSgA Large Cap Value and
Large Cap Growth Opportunities Funds into the Custodian
Contract
Exhibit 9(a)(xiv) Letter agreement incorporating the SSgA Large Cap Value
and LargeCap Growth Opportunities Funds into the Transfer
Agency and Service Agreement
Exhibit 9(b)(xv) Letter agreement incorporating the SSgA Large Cap Value
and Large Cap Growth Opportunities Funds into the
Administration Agreement
Exhibit 10(d) Multiple Class Plan Pursuant to Rule 18f-3
Exhibit 12 Consent of PricewaterhouseCoopers LLP
Exhibit 14(q) Letter of Investment Intent relating to Large Cap Value
Fund/Large Cap Growth Opportunities Fund
Exhibit 14(r) Letter of Investment Intent relating to Class R Shares
Exhibit 16(g)(i) Addendum to Plan of Distribution incorporating the Large
Cap Value Fund/Large Cap Growth Opportunities Fund into the
Plan
Exhibit 16(h) Class R Shares Rule 12b-1 Plan
Exhibit 16(i) Class R Shares Addendum to Shareholder Servicing Agreement
Exhibit 16(j) Class R Shares Addendum to Selected Broker Agreement